NEW YORK: Oil prices on Monday slumped following a sharp price cut by Saudi Aramco while Wall Street stocks rocketed higher, rebounding after a sluggish start to 2024.

US and European oil futures fell around four percent after top exporter Saudi Arabia cut the price of its crude, weighing also on shares of energy majors, analysts said.

According to an Aramco communique reviewed by AFP, the Saudi company plans to reduce prices by two dollars a barrel for customers in Asia.

"This all adds to concerns that the global market is drowning in oil that it can't use up quickly enough, even at attractive prices for consumers," said senior market analyst David Morrison at Trade Nation.

"No doubt the ongoing geopolitical tensions across the Middle East are preventing an even steeper sell-off," he added.

Wall Street indices enjoyed solid gains, including the Dow, which mustered a 0.6 percent advance in spite of an eight percent dive in Boeing shares after an emergency landing on an Alaska Airlines aircraft revived safety worries.

"We basically are having a little bit of a bargain hunting today," economist Hugh Johnson said of the rally.

Monday's rise came after major indices opened 2024 with weekly losses that had halted a more than two month rally propelled by moderating inflation and hopes for 2024 Federal Reserve interest rate cuts.

In the Boeing incident, US aviation authorities ordered the grounding of some 737 MAX planes after a panel blew out on the Alaska Airlines flight, leaving a gaping hole in the cabin while the plane was traveling thousands of feet in the air. No one was seriously injured in the incident.

CMC Markets analyst Michael Hewson called the accident a setback as Boeing is still trying to recover from the damage to its reputation after two crashes of 737 MAX 8 planes, in 2018 and 2019, caused by flaws in the flight control software.

"This most recent incident raises a host of new questions about Boeing's quality control as well as manufacturing processes, at a time when confidence in the 737-MAX is already wafer thin," Hewson said.

European stocks ended higher, although London only turned barely positive in the final minutes of trading. The drop in oil prices weighed on energy shares, with Shell down 2.9 percent as investors reacted to a mixed trading update ahead of the British oil major's annual earnings due next month.

A selloff in tech giants hammered Hong Kong, while Shanghai was also deep in retreat. Tokyo was closed for a holiday.

After Friday's solid US employment data, attention now turns to the release this week of US consumer price figures.

"This report is destined to be a driving factor of the market's rate-cut expectations," said Patrick O'Hare at Briefing.com.

West Texas Intermediate: DOWN 4.1 percent at $70.77 per barrel

Brent North Sea Crude: DOWN 3.3 percent at $76.12 per barrel

New York - Dow: UP 0.6 percent at 37,683.01 (close)

New York - S&P 500: UP 1.4 percent at 4,763.54 (close)

New York - Nasdaq: UP 2.2 percent at 14,843.77 (close)

London - FTSE 100: UP 0.1 percent at 7,694.19 (close)

Paris - CAC 40: UP 0.4 percent at 7,450.24 (close)

Frankfurt - DAX: UP 0.7 percent at 16,716.47 (close)

EURO STOXX 50: UP 0.5 percent at 4,485.48 (close)

Hong Kong - Hang Seng Index: DOWN 1.9 percent at 16,224.45 (close)

Shanghai - Composite: DOWN 1.4 percent at 2,887.54 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.0963 from $1.0943 on Friday

Dollar/yen: DOWN at 144.19 yen from 144.63 yen

Pound/dollar: UP at $1.2740 from $1.2720

Euro/pound: DOWN at 85.88 pence from 86.03 pence

- AFP