EUROPE MARKETS: European Stocks Rise As Oil Shares Gain; Afren Rallies

By Carla Mozee, MarketWatch

LONDON (MarketWatch) -- European stocks were higher Monday, with the energy group benefitting from some improvement in oil prices before investors take off later this week for a holiday break.

The Stoxx Europe 600 rose 0.8% to 342.90, with Afren PLC the best performer as it surged 16%. The oil exploration and production company said Monday it received a "highly preliminary approach" from Nigeria-based oil firm Seplat Petroleum Development Co. about a possible deal.

Seplat has by 5 p.m. on Jan. 19 to say whether it intends to make a firm offer for Afren, said Afren in a statement.

Afren shares are facing a 67% loss for the year, having been hit since mid-year alongside other oil companies, as prices for Brent and U.S. crude oil roughly halved.

But oil prices found some relief on Monday, with the recent sharp drop spurring traders to buy and short-cover as they wrap up 2014. Brent futures jumped more than 3%, near $62 a barrel, and West Texas Intermediate (CLG5) picked up nearly 1%, above $57 a barrel.

Shares of Norwegian oil-services company Seadrill Ltd. picked up 6%, Norway's Petroleum Geo-Services ASA gained 4.7%, and French oil major Total SA climbed 2.5%.

Elsewhere, Greek stocks edged up after Greece's prime minister Antonis Samaras on Sunday offered compromises to resolve an impasse over choosing Greece's future head of state and so avoid snap elections early next year. The Athex Composite rose 0.1% to 862.67.

In Frankfurt, the German DAX 30 was up 0.7% at 9,857.51, France's CAC 40 tacked on 1.1% to 4,289.23, and the U.K.'s FTSE 100 rose 1% to 6,611.77.

Trading volumes are expected to be lighter than usual this week ahead of the Christmas Day holiday on Thursday.

The Stoxx 600 last week rose 2.95%, its strongest weekly rise in a year, according to FactSet data.

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