Key facts
- Brent crude fell nearly 3% to $89.66 on Tuesday morning, the lowest since August 31.
- The drop followed a near 6% fall on Monday on signs the conflict might be nearing an end.
- Trump said at a White House briefing that military action against Iran did not seem necessary at that point.
- The FTSE 100 climbed 45 points, or 0.4%, to 10,828, with BP and Shell among the biggest losers.
- The Stoxx 600 gained 0.9% to 662.54, near a record high hit in early August.
- The AA said the average UK petrol price had fallen 5p a litre since early October, to 169.7p a litre.
Brent crude, the global oil benchmark, fell nearly 3% to $89.66 on Tuesday morning, the lowest since August 31, after US President Donald Trump said the war on Iran was "effectively over" and downplayed the need for military action "at this point." The drop followed a near 6% fall on Monday on signs the conflict might be nearing an end, The Guardian reported.
Speaking at a White House press conference, Trump said Israel and Gulf allies in the region were well protected from Iran and that an escalation was not needed. "At this point, taking the military action doesn't seem to be a very necessary thing – but we're locked and loaded, ready to go for any reason," he told reporters.
European equities rose. The Stoxx 600 gained 0.9% to 662.54, near a record high it hit in early August on hopes for a Middle East peace deal. In London, the FTSE 100 climbed 45 points, or 0.4%, to 10,828. Oil companies BP and Shell were the biggest losers, down 1.7% and 1.5% respectively. Airline stocks rose, with Lufthansa up 1.8% and Air France-KLM up 1.2%.
Daniela Hathorn, a senior market analyst at the trading platform Capital.com, said global markets were extending a recovery after a strong Wall Street session supported by a sharp decline in oil prices and renewed buying in technology stocks. She said the Fed would want more evidence of slowing inflation before reconsidering its policy stance.
The AA said on Monday that the average UK petrol price had fallen 5p a litre since early October, to 169.7p a litre, and that wholesale markets indicated another 10p reduction should be on the way.