Sharecast - The FTSE 100 was up 0.5% at 7,642.49.
On Sunday, Saudi Arabia announced that it will cut oil production next month and do "whatever is necessary" to lift prices.
Saudi said it would cut 1m barrels per day (bpd) in July, while OPEC+ said targets would decline by a further 1.4m bpd from next year.
Russ Mould, investment director at AJ Bell, said: "Higher oil prices typically translate into a strong showing for the UK market due to BP (LON:BP) and Shell’s heavy weighting in the index and so it proved again on Monday.
"Saudi Arabia’s pledge to cut output suggests it wants to see an oil price above $80 per barrel and that it is concerned about the demand implications of a global economic downturn. The FTSE 100 was up 0.5% in early trading, extending the gains seen on Friday after the non-farm payrolls data from the US.
"The market seems keen to take the view this is indicative of a potential soft landing for the US economy given the jobs figures were higher than expected but wage growth has cooled."
On the macro front, a survey out earlier showed that the UK service sector saw output strengthen in May as firms benefited from resilient consumer demand despite higher input costs.
The latest S&P Global/CIPS UK Services PMI Business Activity Index was 55.2, down marginally on April’s 12-month peak of 55.9 but still above the neutral 50.0.
A reading above 50 indicates growth, while one below suggests contraction.
The print was broadly in line with both consensus and the first estimate, of 55.1.
Respondents said input costs had continued to rise, with the latest round of inflation the strongest for three months, largely due to higher wages. Average prices charged also rose steeply.
However, the survey also showed that consumer demand had remained resilient during the month, with cautious optimism about the near-term growth outlook contributing to "robust" rises in output and incoming new work.
The composite PMI - a weighted average of comparable manufacturing and services indices - was 54.0, down marginally on April’s 54.9 and largely in line with expectations. Rising services activity helped offset a fall in manufacturing production during the month.
Tim Moore, economics direct at S&P Global Market Intelligence, said: "Service sector businesses have experienced strong growth so far in the second quarter of 2023, fuelled by resilient demand for consumer and technology services, combined with a post-pandemic tailwind as households switched from spending on goods to services.
"Higher salary payments more than offset lower fuel costs, which meant that overall input price inflation edged up to its strongest for three months in May."
Investors were also mulling the latest data out of China, which showed that activity in the services sector unexpectedly picked up in May.
The Caixin/S&P Global services purchasing managers’ index rose to 57.1. from 56.4 in April, coming in above consensus expectations of 55.2.
Wang Zhe, senior economist at Caixin Insight Group, said: "In general, it remains a prominent feature of the Chinese economy that the services sector is stronger than manufacturing.
"This divergence highlights that economic growth is lacking internal drive and market entities lack sufficient confidence, underscoring the importance of expanding and restoring demand."
In equity markets, BP and Shell (LON:RDSa) gained but telecoms were the biggest risers, with BT, Vodafone and Airtel Africa all sharply higher.
Opioid addiction treatment maker Indivior surged after it reached agreement to resolve litigation claims over Suboxone.
Asos jumped following a report that Turkish online retailer Trendyol made a £1bn approach in late December.
On the downside, packaging group Mondi (LON:MNDI) fell after saying it had terminated a deal to sell its largest plant in Russia to an investment vehicle owned by Russian billionaire Viktor Kharitonin, citing a lack of progress in getting approvals.
Market Movers
FTSE 100 (UKX) 7,645.03 0.50%
FTSE 250 (MCX) 19,268.16 0.62%
techMARK (TASX) 4,614.52 0.54%
FTSE 100 - Risers
Abrdn PLC (LON:ABDN) 212.60p 4.47%
Vodafone Group (LON:VOD) 77.99p 3.12%
Airtel Africa Plc (LON:AAF) (AAF) 126.00p 2.69%
BT Group (LON:BT.A) 147.00p 2.33%
United Utilities Group PLC (LON:UU) (UU.) 1,053.00p 1.59%
HSBC Holdings (LON:HSBA) 611.20p 1.41%
Experian PLC (LON:EXPN) (EXPN) 2,937.00p 1.35%
Severn Trent (LON:SVT) 2,739.00p 1.22%
B&M European Value Retail SA (LON:BMEB) (DI) (BME) 546.20p 1.19%
Smurfit Kappa Group PLC (LON:SKG) (CDI) (SKG) 3,004.00p 1.14%
FTSE 100 - Fallers
Endeavour Mining (EDV (LON:EDV)) 2,112.00p -3.03%
Mondi PLC (LON:MNDI) (MNDI) 1,254.50p -2.83%
Fresnillo (LON:FRES) 678.20p -1.97%
Rolls-Royce Holdings (LON:RR.) 147.95p -1.37%
Scottish Mortgage Investment Trust PLC (LON:SMT) (SMT) 691.60p -0.86%
Informa PLC (LON:INF) (INF) 699.60p -0.74%
Antofagasta (LON:ANTO) 1,446.00p -0.72%
Auto Trader Group (AUTO) 612.60p -0.71%
Whitbread (LON:WTB) 3,353.00p -0.62%
NatWest Group PLC (LON:NWG) (NWG) 263.50p -0.57%
FTSE 250 - Risers
ASOS (LON:ASOS) (ASC) 383.30p 9.39%
Indivior (INDV) 1,601.00p 8.54%
Elementis (LON:ELM) 114.40p 4.00%
Sirius Real Estate Ltd. (SRE) 88.20p 3.95%
PureTech Health (PRTC) 239.00p 3.69%
Synthomer (LON:SYNTS) (SYNT) 94.85p 3.27%
JPMorgan (NYSE:JPM) Japanese Inv Trust (JFJ) 513.00p 2.91%
Morgan Advanced Materials (LON:MGAMM) (MGAM) 298.50p 2.75%
IWG (IWG) 157.40p 2.67%
Ithaca Energy (ITH) 145.20p 2.54%
FTSE 250 - Fallers
Dr. Martens (DOCS) 135.40p -3.15%
Just Group (JUST) 84.00p -2.78%
AJ Bell (AJB) 321.20p -2.67%
Future (FUTR (LON:FUTR)) 717.50p -2.38%
Centamin (DI) (LON:CEY) 98.75p -2.32%
Ferrexpo (LON:FXPO) 97.95p -2.25%
Aston Martin Lagonda Global Holdings (AML) 270.00p -2.10%
Capital Gearing Trust (CGT) 4,650.00p -1.69%
WH Smith (LON:SMWH) 1,621.00p -1.34%
Energean (ENOG) 1,134.00p -1.31%
