Oil rally helps energy stocks lead European shares higher
02 Jul 2021
European shares ended higher on Thursday as a rally in crude prices saw energy stocks surge more than 2%, while strong earnings reports helped dispel some concerns over the infectious “Delta” variant of the coronavirus.
The pan-European STOXX 600 closed 0.6% higher at 455.63 points, with energy stocks marking their best day in one month. Energy services provider TechnipFMC Plc was the top gainer in the sector, adding 4.4%.
Oil prices rose almost $2 on the prospect of increasing global demand, while lower U.S Crude stocks helped. Reuters also reported that OPEC would hike production by less than expected, which could result in a supply shortfall and support oil prices later this year.
“This approach comes amid a spreading Delta variant, which is still impacting mobility in certain geographies. Separately, Washington’s negotiations with Iran could also quench a substantial portion of expected deficits down the road,” analysts at TD Securities wrote in a note.
“A Summer Breakout in energy markets can continue to gather steam with supply artificially constrained.”
Travel-related stocks jumped 1.9% after falling for four days in a row on fears of more restrictions following a spike in the number of COVID-19 cases in Asia and the United Kingdom.
Airlines EasyJet, British Airways-owner IAG and Ryanair rose between 1.5% and 4%.
The STOXX 600 was now within 1% of a record high hit in June, as growing optimism over a vaccine-led economic recovery this year saw sentiment jump to a 21-year high.
The FTSE MIB climbed up by 0.20% to 25,331.71. In the cash markets, the DAX futures Germany was trading up 0.45% to 15,674.17. CAC 40 futures in France rose by 0.30% to 6,572.60 while the FTSE 100 futures in the U.K. was up by 0.50% to 7,159.97. ,at the time of writing.