European energy stocks surge after surprise OPEC+ output cut

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European energy stocks surge after surprise OPEC+ output cut
Credit: © Reuters.

By Scott Kanowsky -- Shares in European oil companies jumped on Monday after OPEC+ nations unveiled a surprise output reduction over the weekend to offset worries over weakening demand.

Energy giants like Shell PLC (LON: SHEL ), BP PLC (LON: BP ), and France's TotalEnergies SE (EPA: TTEF ) all gained more than 3% in early trading, while the  STOXX Europe 600 Oil & Gas index - a tracker of stocks in the sector - climbed nearly 4%.

Oil prices, meanwhile, surged, with U.S. crude futures rising 5.43% to $79.78 a barrel and the Brent contract moving higher by 5.50% to $84.28 as of 03:22 ET.

The Organization of Petroleum Exporting Countries and its allies, known collectively as OPEC+, unexpectedly announced on Sunday that it will slash production by over 1 million barrels per day through to the end of this year.

This move came ahead of a virtual meeting of the group’s monitoring committee later today, which had been widely expected to confirm the production levels agreed upon in November.

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