Volkswacht Bodensee - Oil back at $100 as US strikes douse Iran war hopes

The United States and Iran have been working on an agreement to end the Middle East war and reopen the crucial waterway to tanker and cargo traffic since a fragile ceasefire on April 8.

But the fresh strikes had Tehran warning it was ready to retaliate after it accused Washington of breaching their truce with what US Central Command described as "self-defence strikes".

Stock markets had rallied Monday and crude futures dropped below $100 a barrel after reports that a deal might come within days.

That was before US forces said they had attacked missile sites in southern Iran and boats trying to lay mines.

Brent North Sea crude, the international benchmark, jumped almost 4.5 percent Tuesday to edge back above $100 a barrel.

Oil price increases had been modest beforehand, "underlining the market's strong belief that the Strait of Hormuz will reopen" said Arne Lohmann Rasmussen, a commodities analyst at Global Risk Management.

Equity markets were mixed with the Dow just off but the tech-heavy Nasdaq and the S&P 500 in the green two hours into trading.

In Europe, Frankfurt and Paris closed off around one percent with London ending just 0.2 percent ahead as traders returned after a long holiday weekend in Britain.

British oil giant BP topped the losers' chart, off more than four percent after it unexpectedly removed Albert Manifold as chairman only months into his tenure, citing "serious concerns" about governance standards, oversight and conduct at the company.

Kathleen Brooks, research director at XTB, warned that Manifold's departure, coming barely three years after former CEO Bernard Looney was replaced over allegations of misconduct, "suggests a lack of stability at the firm, which is bad news for shareholders".

AJ Bell investment director Russ Mould focused on the Iran situation as he noted that "continued doubts about the potential for a deal and an overnight pre-emptive US strike on Iran mean any euphoria is being kept in check," his concerns echoed by Brooks.

The US strikes came as top Iranian negotiators arrived in Doha for another round of talks to end three months of conflict, and as the Israeli military stepped up hostilities with Iran-backed Hezbollah in southern Lebanon.

In Asia, Seoul's stock market hit a new record high above 8,000 points as chipmakers, carmakers and shipbuilders continued to outperform.

In Europe, investors were quick to express disappointment at Ferrari's unveiling of its first electric model, with shares in the Italian luxury carmaker skidding six percent.

- Key figures at around 1550 GMT -

Brent North Sea Crude: UP 4.4 percent at $100.41 a barrel

New York - DOW: DOWN 0.2 percent at 50,467,08 points

New York - S&P 500: UP 0.5 percent at 7,508.30

New York - Nasdaq: UP 0.9 percent at 26,570.41

London - FTSE 100: UP 0.2 percent at 10,491.39 (close)

Paris - CAC 40: DOWN 1.0 percent at 8,173.11 (close)

Frankfurt - DAX: DOWN 0.8 percent at 25,184.89 (close)

Hong Kong - Hang Seng Index: FLAT at 25,599.45 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 64,996.09 points (close)

Shanghai - Composite: DOWN 0.2 percent at 4,145.37 (close)

Euro/dollar: DOWN at 1.1620 from 1.1646 on Monday

Pound/dollar: DOWN at 1.3439 from $1.3502

Dollar/yen: UP at 159.36 from 158.90 yen

Euro/pound: UP at 86.47 from 86.25 pence

burs-bcp/ajb/cw/rmb

E.Burkhard--VB