ASX-listed oil stocks have posted strong gains in early trading, driving the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) up 0.7%.

That comes after the Organisation of Petroleum Exporting Countries (OPEC) announced an agreement to cut production of oil for the first time in eight years. Non-OPEC member Russia has also agreed to cut production.

Frankly, the country members of OPEC didn’t have much choice. They have all relied on oil prices to drive their economies for decades, and several countries were going backwards with oil prices in the US$40 to US$50 a barrel range.

Brent crude oil price over last year

Source: Bloomberg

They needed oil prices higher, and benchmark prices surged overnight. WTI oil gained 9.6% to US$49.57 a barrel, and Brent Crude rose 8.6% to US$50.36 a barrel.

Oil-related stocks on the ASX have jumped as a result.

Company Share Price Market Cap ($m) Price change
Sundance Energy Australia Ltd (ASX: SEA) $0.20 $256.1 17.1%
Liquefied Natural Gas Ltd (ASX: LNG) $0.70 $357.7 13.8%
Beach Energy Ltd (ASX: BPT) $0.89 $1,654.3 10.9%
Santos Ltd (ASX: STO) $4.33 $7,689.7 10.2%
AWE Limited (ASX: AWE) $0.66 $348.6 10.0%
Oil Search Limited (ASX: OSH) $7.00 $10,658.8 8.5%
Worleyparsons Limited (ASX: WOR) $9.47 $2,333.8 9.5%
88 Energy Ltd (ASX: 88E) $0.04 $162.6 8.3%
Karoon Gas Australia Limited (ASX: KAR) $1.99 $487.9 6.7%
Origin Energy Ltd (ASX: ORG) $6.36 $11,160.3 7.1%
Cooper Energy Ltd. (ASX: COE) $0.34 $227.3 6.2%
Woodside Petroleum Limited (ASX: WPL) $31.25 $26,326.4 5.5%
BHP Billiton Limited (ASX: BHP) $25.57 $130,025.6 4.8%
Senex Energy Ltd (ASX: SXY) $0.26 $296.7 4.9%
FAR Ltd (ASX: FAR) $0.07 $303.4 4.6%

Source: Google Finance

The problem energy stocks and OPEC countries face is that as oil prices increase, an increasing number of higher-cost producers like US shale drillers can restart production, increasing global supply and negatively impacting on the oil price.

OPEC may have won a battle today, but it’s unlikely that they have won the war. I wouldn’t be surprised to see the oil cartel forced to cut production again.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.