Europe Moves Higher as Oil Surges

Financial markets in Europe closed higher on Monday as the Dollar took a pause to breathe and oil prices jumped higher to their highest level in three weeks. There is renewed optimism that OPEC will reach an agreement to cut production.

The pan-European STOXX 600 was 0.25perecent higher after fluctuating most of the day. Sectors were mostly mixed but basic resources outperformed rising over two percent thanks to a spike in metal prices on the London Commodity Exchange.

Also, President of the European Central Bank (ECB) Mario Draghi defended his bank’s actions up until now and suggested the ECB will continue on the course of their current monetary support. He told the European Parliament that “The return of inflation towards our objective still relies on the continuation of the current, unprecedented level of monetary support, in spite of the gradual closing of the output gap.”

Oil Supports the Markets in Europe

Oil prices surged higher during the trading session in Europe which supported stocks. Members of OPEC seem to be close to reaching a deal to cut output after comments from Russian President Vladimir Putin. Oil and gas plays surged three percent on the day as the global benchmark Brent rose 3.69 percent to $48.60 per barrel. US WTI Crude was up 3.63 percent to $47.35 per barrel during the session.

Turning towards politics, former French President Nikolas Sarkozy was defeated in primaries and dropped out of the 2017 presidential election. The second round will feature the right wing candidate from Les Republicains against Francois Fillon. Alain Juppe is also in the running.

In Germany, current Chancellor Angela Merkel confirmed expectations that she will run for a a fourth term in the upcoming elections.