By Scott Kanowsky and Ambar Warrick
Investing.com -- Shares in European oil companies rose on Monday following reports that the Organization of Petroleum Exporting Countries and its allies will decide on deep production cuts at a meeting later this week in a bid to support dipping oil prices.
Multiple reports said that OPEC+, which is led by Saudi Arabia and Russia, is considering production cuts of over 1 million barrels a day (bpd) when it meets on Wednesday.
The group is set to gather in Vienna on Wednesday; its first in-person meeting since March 2020.
Oil firms BP PLC (LON:BP), Shell PLC (LON:SHEL), and TotalEnergies SE (EPA:TTEF) all rallied in early European trading.
Meanwhile, the price of London-traded Brent oil futures and Crude Oil WTI Futures also jumped, as both contracts pare back steep losses seen in September and the third quarter.
The output cut would come amid several signals from OPEC members that these recent declines in crude prices were unfounded, and that production cuts to stabilize prices are in order. However, the move could complicate recent efforts by governments around the world to lower energy costs that have driven a spike in inflation.
Oil prices plummeted 11.2% in September, their worst month in nearly a year, as hawkish signals from the Federal Reserve and other central banks raised concerns that economic growth will slow drastically in the face of rising interest rates.
Markets were flush with supply as well after the United States drew heavily from its strategic petroleum reserve, bringing stockpiles to their lowest level in nearly 40 years.