Wednesday was a full-on good day in the oilpatch. At lunchtime, when Natural Resources Minister Jim Carr spoke on pipelines at the Calgary Chamber of Commerce, the Toronto Stock Exchange energy sub-index had increased in value by 8 per cent, adding billions to the market capitalization of Canada's energy sector.

The mood at the luncheon was light, without the tension that has hung over the oilpatch in the past two years.

Tuesday's federal government approval of two new oil pipelines was an early stocking stuffer for the oilpatch, and an OPEC production cut less than 24 hours later was another welcome gift.

Cheating might not be as easy this time around. - Jim Krane , Rice University

"It gives some nice momentum to 2017," said Brian Schmidt, CEO of Calgary-based Tamarack Valley Energy. "It's nice prices are up instead of collapsing. That could have been the outcome from these meetings."

A rise in prices is especially welcomed by Schmidt after Tamarack's recent $400-million acquisition of Spur Resources.

Oil prices jumped eight per cent immediately after the OPEC announcement Wednesday morning to about $50 US a barrel in North America.

Khalid Al-Falih, minister of energy, industry and mineral resources of Saudi Arabia, speaks to journalists prior to the start of the OPEC meeting. (Ronald Zak/Associated Press) The Saudis and the rest of the cartel announced in Vienna an oil production cut of 1.2 million barrels a day, beginning in January. Commodity analysts had already suggested the global oil supply glut was decreasing and beginning to balance out with demand. The OPEC decision could speed up that process.

To cheat or not to cheat?

But with every OPEC decision comes skepticism, and that's why Schmidt will take advantage of the cartel's announcement and lock in his company's production at these prices with hedges. He questions whether the cartel has the discipline to make sure each country obeys the new quotas.

"To be honest, I think that's a very likely outcome that we need to think about," he said. "Yeah, there's an agreement, but they've never really shown the discipline needed to solidify OPEC."

We've had to adapt. In many ways, it's made us stronger.' - George Fink, Bonterra Energy

OPEC has a long, well-developed reputation as a cartel that cannot hold to its promises. But that could change.

"There are more ways of verifying compliance now than there were in the old days, so cheating might not be as easy this time around," said Jim Krane, who follows OPEC at Rice University in Houston.

"The Saudis have made a major concession and they are not going to be pleased if their fellow members are cheating on their quotas, so I would suspect that if we see rampant cheating, all bets are off."

Life after $50 oil

With oil at $50 US a barrel, more Canadian oil companies can turn a profit, depending on how deeply they cut during the downturn and the quality of their oil properties. If prices rally a bit further north that could make a big difference in oilpatch activity.

"There might be an aggressive drilling program started again if we get to the $55 or $60 range," said George Fink, CEO of Calgary-based Bonterra Energy. "I don't think that will happen at $50 or $52, we need a little bit more than that to get a reasonable return for the invested dollars."

Fink said that $55 crude is a sweet spot for many producers, because it's high enough to turn a profit, but not so high as to encourage a wave of new production in the United States.

Investors are somewhat more optimistic than that though. Shares in Suncor and Canadian Natural Resources, two of Canada's largest independent producers, shot higher on Wednesday.

"These things are trading back at levels where they were in September 2014," said Martin Pelletier, a money manager with TriVest Wealth Counsel. "And where was oil back in September 2014? … $92."

That does not mean that investors are expecting oil to return to $90 a barrel. But the energy sector has been wrestling with costs for two years and is much more efficient. It can make money at a lower price for crude.

Natural Resources Minister Jim Carr speaks to a Calgary Chamber of Commerce luncheon about pipelines. After the OPEC production cut and pipeline approvals, the mood was buoyant. (Mark Matulis/CBC) "We've had to adapt," said Fink. "In many ways, it's made us stronger."

Pipelines vs. OPEC

Canadian oil producers were already celebrating Tuesday's decision by the federal government to approve Enbridge's Line 3 replacement and Kinder Morgan's Trans Mountain pipeline expansion proposals.

Line 3 is an aging pipe from Alberta to Wisconsin that will be replaced and result in an additional 370,000 barrels a day being shipped to the U.S. The expansion of Trans Mountain is the more coveted project for the oilpatch, as it will carry 590,000 barrels a day from Edmonton to the Port of Vancouver.

When the natural resources minister spoke to a business audience in Calgary on Wednesday, the reception was noticeably more upbeat than when he spoke to the same crowd in January.

However, the pipeline decision had no effect on the trading of energy companies, probably because there is a distance to go before shovels hit the ground. If you compare the performance of energy shares and Canada and the U.S., collectively, they were up eight per cent at the end of the day in both countries.

"No pipelines," said Pelletier. "All OPEC."