Royal Dutch Shell led the sector higher, rising almost 5 percent after the company said it would axe 6,500 jobs this year and step up spending cuts.
6,500 jobs will be cut across the board.
The reductions are due to the continued downturn in oil prices.
Shell, which on Thursday also announced a slide in profits, a further cut to investment and the sale of Japanese operations, provided a stark warning for the industry, saying “today’s oil price downturn could last for several years”.
Shell disclosed the figures as it published second quarter results showing a 35% fall in earnings to 3.36 billion US dollars (£2.16 billion). That beat the $US3.4 billion average estimate of 16 analysts surveyed by Bloomberg.
The world’s biggest oil companies are leaning on refinery businesses they were scaling down over the past five years to help offset lower earnings from selling crude. The Hague-based company employs about 94,000 people in more than 70 countries and territories.
Separately, Royal Dutch Shell has signed an agreement to sell 33.3% stake in refiner Showa Shell Sekiyu to Idemitsu Kosan for approximately JPY169bn ($1.4bn).
Around 20 to 30 percent of the $30 billion of asset sales expected between 2016 and 2018 will come from the downstream and midstream businesses, Shell said, leaving the expanded Shell-BG group to focus on fewer but larger and more competitive assets. Shell also said that the $70bn (£44.8bn, €63.9bn) BG acquisition is on track.
Oil prices have plummeted by around half in value to around $50 a barrel since June last year because of the supply glut.
The oil major said it remained committed to its dividend program, confirming full-year payouts of $1.88 per share for 2015 and at least as much next year.
In addition to taking the knife to costs, the company is also planning to spend $3 billion less on capital investment in 2015 than it forecast just three months ago.
Van Beurden said: “We will take a very good look at the North Sea and make sure that out of two strong portfolios will crystallise the strongest possible core”.
“We will reshape the company once this transaction is complete, ” Ben van Beurden, Shell’s chief executive, said in a statement.
The gas producer announced reductions in capital investments for a second time this year, shaving another $3bn (£642m) off its 2015 budget to bring it to $30bn.