By Robb M. Stewart 
 

MELBOURNE--A surge in oil prices buoyed Australian energy shares and encouraged broad buying that lifted the local equities market to a four-week high Thursday.

Crude-oil prices surged 5.3% in New York trade, the biggest gain in more than five months, after the Organization of the Petroleum Exporting Countries signaled it could agree to limit production in November.

Ending near its highs of the day, the S&P/ASX 200 advanced 58.9 points, or 1.1%, to 5471.3--its highest closing level since August 30.

The energy sector surged 6.3%, while the basket of materials stocks picked up 2.8%. Only the property trusts and healthcare sectors lost ground.

OPEC members reached an understanding at a meeting Wednesday in Algeria that there was a need to scale back production. They agreed on a preliminary outline to cut collective output to between 32.5 million and 33 million barrels a day, down from 33.2 million barrels daily in August, national oil ministers said. The cartel hasn't approved a cut in production since 2008.

The possible breakthrough deal on curbing the global supply glut came after months of false starts, although there were signs of caution among traders as oil prices gave up early gains by midday in Asia.

Oil-and-gas producers Woodside Petroleum Ltd., Oil Search Ltd., Santos Ltd. and Origin Energy Ltd. each rallied by 7% or more. Smaller producer Beach Energy Ltd. jumped 10%.

Mining and energy company BHP Billiton Ltd. climbed 4.7%. Among other miners, Rio Tinto Ltd. added 3.7%, South32 Ltd. gained 2.5% and iron-ore producer Fortescue Metals Group Ltd. was 3.5% higher.

The major banks also strengthened, with Commonwealth Bank of Australia 0.8% stronger. Australia & New Zealand Banking Group Ltd. rose 0.7% and National Australia Bank Ltd. added 0.5%, but Westpac Banking Corp. was unchanged.

 

Write to Robb M. Stewart at robb.stewart@wsj.com

 

(END) Dow Jones Newswires

September 29, 2016 02:53 ET (06:53 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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