The pan-European Stoxx 600 index jumped 1.27% at 1213 GMT, with Britain’s oil-stock dominated FTSE 100 up 1.48%.
BP (LON:BP) reported an estimate-busting third-quarter profit of $8.15bn and also announced another $2.5bn in share buybacks. Sentiment was also boosted as state oil giant Saudi Aramco (TADAWUL:2222) reported a 39% rise in net income for the third quarter year-on-year, on the back of higher crude prices.
Net income rose to $42.4bn from $30.4bn a year earlier. Free cash flow soared to a record $45bn from $28.7bn.
Despite the profit bonanza, BP shares were down slightly in early trade. The UK government has already imposed a windfall tax on energy companies, but with a £40bn hole in state finances caused by the Conservative’s disastrous mini-budget, calls are increasing for the levy to be extended.
Investors are also eyeing the US Federal Reserve's two-day policy meeting, and expect a 75-basis-point increase in interest rates on Wednesday. The Bank of England is also expected to lift its benchmark this week.
"While a 75-basis point hike looks locked in tomorrow, the messaging is what investors are interested in. Despite inflation remaining at eye-watering levels, there's a growing belief that the central bank will signal a desire to ease off the brake over the following few meetings starting with a 50bps hike in December," said Oanda market analyst Craig Erlam.
"It may come too late to avoid a recession but the Fed has been very clear from the start that while a soft landing is the desirable and attainable outcome, getting inflation under control is the primary focus. The question is whether the central bank believes its efforts will achieve that or if more needs to be done."
"With the economy weakening, earnings not impressing and yield curves inverting - signalling an incoming recession - many now believe the risks of aggressive tightening are greater than a more gradual approach. The economy has a lot of tightening to absorb once rates likely hit the 3.75-4% range this week."
Business surveys in Asia showed that the region's factory output weakened in October as global recession fears and China's zero-Covid policy hurt demand, while the Reserve Bank of Australia stuck implemented an expected 25 basis points rate hike and revised up its inflation outlook.
In equity news, Ocado (LON:OCDO) shares delivered a massive 34% rise after the grocery technology firm struck a partnership with South Korean business conglomerate Lotte Shopping to develop the latter's online offering.
The sentiment spilled over into the food delivery sector, with Just Eat Takeaway, HelloFresh and Delivery Hero also making strong gains.
Reporting by Frank Prenesti for Sharecast.com