What happened

Shares of Whiting Petroleum (NYSE:WLL) are in rally mode again today, having risen more than 10% by 10:30 a.m. EST on Friday. The energy company is bouncing back after an analyst-fueled sell-off yesterday thanks to some good news from OPEC.

So what

Whiting Petroleum's stock has been bouncing all over the place this week. Shares surged 12.7% on Wednesday thanks to a big uptick in oil prices. Fueling that rally was news that U.S. oil inventory levels had declined sharply as well as reports that OPEC was nearing an agreement to keep a lid on its output.

An oil pump with a beautiful sunset in the background.

Image source: Getty Images.

The company's stock, however, tumbled about 7% yesterday after KeyBanc downgraded shares to sector perform from overweight. One factor driving the downgrade was weaker oil prices, a concern for Whiting due to its high debt level. The bank noted that the company plans to reduce debt by selling assets, which lower commodity prices may make difficult right now.

Oil, however, is rallying again today after OPEC and its partners agreed to reduce their output by another 500,000 barrels per day. That should help drain off excess inventory levels, further bolstering the price of oil. Crude is already up more than 1% on the day, with the U.S. oil benchmark, WTI, now above $59 a barrel. That higher crude price is excellent news for Whiting, as it will enable the company to generate more cash, which it could use to pay off debt. It also makes its assets more valuable, which could help it fetch more money in future sales.

Now what

OPEC's agreement to further reduce its supplies to the oil market should relieve some of the pressure that has been on it in recent months. Therefore it should make it much easier for financially weaker companies like Whiting to shore up their financial situation.