Shares of Petroleo Brasileiro SA Petrobras (PBR) surged 5.04% in intraday trading on Thursday, following the company's announcement of a reduction in diesel prices for distributors. The Brazilian oil giant's stock performance outpaced the broader market, reflecting investor optimism about the strategic pricing move.

Petrobras revealed plans to cut the price of diesel A to distributors by 0.12 Brazilian real ($0.02) to 3.43 reais per liter, effective Friday. Additionally, the price of diesel B, a mixture of 86% diesel A and 14% biodiesel, for end consumers will be reduced by 0.10 real to 2.95 reais. This decision comes as part of the company's ongoing efforts to remain competitive in the domestic fuel market and potentially boost demand.

The market's positive reaction suggests that investors view this price reduction as a strategic move that could enhance Petrobras's market share and potentially drive higher sales volumes. While lower prices might impact per-unit revenues, the anticipated increase in demand could offset this, leading to improved overall financial performance. Moreover, this pricing strategy may be seen as a proactive measure to adapt to changing market conditions and strengthen the company's position in Brazil's energy sector.