European airline stocks climb as oil price dip helps ease fuel cost worries

Published 05/05/2025, 09:50
© Reuters.

Investing.com - Shares in European airlines rose on Monday following a drop in oil prices sparked by the OPEC+ producer group signaling over the weekend that it will further increase output in the coming months.

Germany’s Lufthansa (ETR:LHAG) climbed by more than 2%, while Air France KLM (EPA:AIRF) rallied by over 2.5%, and Norwegian Air Shuttle (OL:NAS) gained more than 4.6%, as the decrease helped ease concerns over the airline industry’s fuel costs. Stock markets in London were closed for a bank holiday.

The increases echoed an earlier uptick in shares in Australia’s Qantas Airways (ASX:QAN) to a one-month high.

The prospect of higher supplies and tepid demand dented crude, which was already nursing steep losses so far in 2025. Monday’s losses put oil back in sight of a four-year low hit in early-April.

Brent oil futures for June fell 2.0% to $60.05 a barrel, while West Texas Intermediate crude futures declined 2.1% to $56.59 per barrel by 03:34 ET.

The Organization of the Petroleum Exporting Countries and its allies -- a group known as OPEC+ that makes up a bulk of global oil production -- agreed to raise output by 411,000 barrels per day from June, during a meeting over the weekend.

The uptick is nearly three times the volume that was initially signaled by OPEC+, and will see key member states Saudi Arabia and Russia increase production.

Monday’s slump in oil prices adds to crude’s weakness so far this year. A key driver of this trend has been U.S. President Donald Trump’s trade agenda, which has seen the U.S. impose -- and then partially delay -- punishing import tariffs on most countries.

In particular, Trump imposed 145% tariffs on top oil importer China, drawing ire and retaliatory tariffs of about 125% from Beijing. Oil prices took little relief from the U.S. and China expressing some openness to trade talks last week.

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