Volkswacht Bodensee - Oil drops, European stocks climb as Trump delays Iran move

Brent dropped more than two percent, weighing on the share prices of energy majors, after US President Donald Trump said Thursday that he would decide whether to join Israel's strikes on Iran within the next two weeks.

Trump spoke as top European diplomats prepared to meet Iran's Foreign Minister Abbas Araghchi in Geneva on Friday to discuss the country's nuclear programme.

Asian equity indices closed out the week mixed and the dollar retreated against key rivals.

"News that president Trump would delay any decision on joining Israel's attacks against Iran has boosted the market mood," said Kathleen Brooks, an analyst at trading firm XTB.

"Brent crude has dropped... as traders price out the worst-case scenario for geopolitics," she said.

Crude futures had soared and global equities slumped in recent sessions on the Israel-Iran conflict, as investors priced in the risk of tighter oil supplies, which would likely weigh on economic growth.

"While the immediate prospect of a US intervention in Iran may have diminished, the fact this is reportedly a two-week hiatus means it will remain a live issue for the markets going into next week," said Dan Coatsworth, an investment analyst at AJ Bell.

"A meeting of European ministers with their Iranian counterparts to try and formulate a deal today could be crucial."

The main US oil contract, WTI, rose Friday as a result of low trading volumes following the Thursday market close to mark Juneteenth, and also thanks to data indicating a large drop to American crude stockpiles, analysts said.

While the Middle East crisis continues to absorb most of the news, Trump's trade war remains a major obstacle for investors as the end of a 90-day pause on his April 2 tariff blitz approaches.

"While the worst of the tariffs have been paused, we suspect it won't be until those deadlines approach that new agreements may be finalised," said David Sekera, chief US market strategist at Morningstar.

"Until then, as news emerges regarding the progress and substance of trade negotiations, these headlines could have an outsize positive or negative impact on markets," he said.

- Key figures at around 1100 GMT -

Brent North Sea Crude: DOWN 2.2 percent at $77.11 per barrel

West Texas Intermediate: UP 0.6 percent at $73.92 per barrel

London - FTSE 100: UP 0.5 percent at 8,833.81 points

Paris - CAC 40: UP 0.5 percent at 7,593.39

Frankfurt - DAX: UP 0.9 percent at 23,262.14

Tokyo - Nikkei 225: DOWN 0.2 percent at 38,403.23 (close)

Hong Kong - Hang Seng Index: UP 1.3 percent at 23,530.48 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,359.90 (close)

Euro/dollar: UP at $1.1527 from $1.1463 on Thursday

Pound/dollar: UP at $1.3495 from $1.3429

Dollar/yen: DOWN at 145.39 yen from 145.63 yen

Euro/pound: UP at 85.42 pence from 85.36 pence

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H.Kuenzler--VB