OIL JUMPS AFTER OPEC, ALLIES AGREE TO CUT OUTPUT THROUGH 2018

Crude prices got a boost Friday morning after the Organization of the Petroleum Exporting Countries and other big producers including Russia agreed Thursday to keep limiting their output through the end of 2018, writes The Wall Street Journal’s David Hodari.

Brent crude oil, the global benchmark, was up 1.07% at $63.30 a barrel in midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.7% at $57.80 a barrel.

In all, 24 countries that control about 60% of global crude production pledged to withhold about 1.8 million barrels a day of output—almost 2% of the world’s total.

The agreement was clinched at a crucial juncture for an oil industry in the midst of a fragile recovery.

“The producers also sounded a note of caution, highlighting that they could review whether output limits are still needed at their next meeting in June—a point insisted on by Russia,” write Summer Said, Benoit Faucon and Christopher Alessi.

“It’s pretty much what was expected: a rollover until the end of the year. Anything more than that and they would have risked bringing on more U.S. supply, anything less and prices would have collapsed,” said Thomas Pugh, commodities economist at Capital Economics.

WHAT A U.S. TAX OVERHAUL MEANS FOR ENERGY COMPANIES

Oil giants such as Exxon Mobil Corp. and Chevron Corp. stand to see significant gains from the GOP tax legislation, writes Bradley Olson.

A reduction in the corporate tax rate is expected to boost earnings growth, which many analysts consider to be the biggest driver of long-term stock gains.

Goldman Sachs forecast that if Congress manages to cut the federal corporate tax rate to 25% from the current 35%, per-share earnings growth in the S&P 500 next year could rise to 15%—more than double the bank’s current estimate of 7% growth.

Proposals such as reducing the overall corporate tax rate and lowering taxes on overseas profits will “help unleash economic growth and allow our industry to continue providing safe, reliable energy for Americans,” Jack Gerard, president of the American Petroleum Institute, said earlier in November.

The bill making its way through the Senate also includes a measure that would potentially open part of the Alaska National Wildlife Refuge to oil drilling, including the leasing of 800,000 acres for exploration.

The Senate is expected to vote on the legislation on Friday.

SHELL STRIKES DEAL TO DEVELOP VAST AUSTRALIAN GAS FIELDS

Elsewhere, Royal Dutch Shell PLC has agreed to develop a massive natural-gas resource buried in coal deposits in eastern Australia, writes Robb M. Stewart for Dow Jones Newswires.

The energy giant and various partners have agreed to a 27-year sales deal covering 5 trillion cubic feet of gas that will anchor the staged development of the Arrow fields in Queensland.

Australia is set to overtake Qatar as the world’s biggest exporter of LNG in the next couple of years.