The London FTSE index closed up 0.7 percent, the French CAC jumped 1.1 percent while the German DAX rallied to close 1.5 percent up, following a survey that showed an improvement in German business confidence.
The closely-watched Ifo Business climate index rose from 106.7 points in April to 107.7 points in May. Ifo said that "business confidence in German industry and trade has improved in all four main sectors (manufacturing, construction, wholesaling and retailing)."
Meanwhile, oil prices moved closer towards $50 a barrel on Wednesday, driven by new figures by the U.S. Energy Information Administration who reported that U.S. crude stockpiles had fallen by 4.2 million barrels in the previous week.
In stocks, Royal Dutch Shell announced further job cuts and said it would reduce the size of its oil and gas output in Ireland and the U.K. as a result of falling oil prices. Shares however remained strong, finishing up 2.3 percent.