Shares of energy producers rose alongside oil futures amid optimism that the extension of an Organization of the Petroleum Exporting Countries production deal would help balance supply and demand. Earlier this week, U.S. stockpile data showed the first decline in production in some time, alleviating worries that shale oil drillers would plug the hole in global supplies created by the OPEC deal. Thomas Digenan, head of U.S. intrinsic value equities at UBS Asset Management, said expectations that shale oil production would rebound quickly in the wake of the oil bust were unfounded, given the fact that unconventional wells can take six to nine months to develop. Other production can take even longer to come back online, he added. "Deepwater stuff takes a couple of years to get online, so you don't have any deepwater projects put on at these prices," said Mr. Digenan. "I do think, if you see signs that OPEC can withstand lower for longer on output, you could see pop on oil prices." The stocks set to gain the most from a rebound in oil prices are likely the independent exploration-and-production companies, rather than the large integrated oil companies, Mr. Digenan said. Among independent drillers, both Devon Energy and Continental Resources rose sharply Friday.
-Rob Curran, email@example.com
(MORE TO FOLLOW) Dow Jones Newswires
May 19, 2017 16:48 ET (20:48 GMT)