The Oil Search Ltd (ASX: OSH) share price has rocketed higher in early trade as oil prices continue to soar.
Why is the Oil Search share price surging?
Oil Search is the largest oil and gas exploration and development company incorporated in Papua New Guinea.
According to the company's FY20 interim result, Oil Search produced 14.7 million barrels of oil equivalent (mmboe) for the half year ended 30 June 2020.
That makes Oil Search one of the larger producers on the ASX alongside the likes of Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL).
2020 was a bitter pill to swallow for investors as the Oil Search share price plummeted more than 50% in the March bear market.
Shares in the Aussie oil producer fell from $7.91 in late January to just $1.81 in March 2020. That came as coronavirus shutdowns crimped demand for energy in key industries like manufacturing and travel.
However, the Oil Search share price has started the year strongly and climbed 5.7% higher in early trade on Thursday. At the time of writing, the Oil Search share price is trading up 5.53% at $4.10.
Other major energy producers are also seeing share price gains this morning. The Woodside share price is up 2.6% to $23.80 per share while Santos shares are trading 4.17% higher at $6.74 per share.
That comes as oil prices continue to recover and surge to new 10-month highs. Crude oil prices are at their highest level since February 2020 after Saudi Arabia flagged surprise output cuts on Tuesday.
Saudi Arabia is set to voluntarily cut 1 million barrels of production per day in good news for investors. The Oil Search share price has jumped on the news and is now up 9.0% this week.
Foolish takeaway
Shares in Aussie oil producers are climbing higher to start the day on Thursday. A surprise OPEC+ cut and positive momentum for the S&P/ASX 200 Index (ASX: XJO) are helping kickstart a good opening week in 2021.
