The dollar continued to face pressure amid uncertainty over tariffs, while Europe's main stock markets steadied after larger losses in Asia.

"Traders focused on the prospect of a US/Iran nuclear deal which could see economic sanctions lifted on the latter and potentially lead to greater supplies of oil," noted Russ Mould, investment director at AJ Bell.

Trump's Iran remarks came after the Islamic republic held its fourth round of talks with the US administration, which has sought to avoid a threatened military strike by Israel on Tehran's contested nuclear programme.

Both main crude contracts plunged around 3.5 percent in value on hopes that US sanctions on Iran may be lifted as part of the deal, which could, in turn, increase the Islamic republic's oil exports.

Share prices of British energy giants BP and Shell slumped in London on signs of progress on a deal.

However, London's stock market edged up overall as official data showed Britain's economy grew more than expected in the first quarter -- before UK business tax hikes and US tariffs took effect.

Paris and Frankfurt stock markets dipped.

The European Union's official data agency revised down eurozone growth to 0.3 percent in the first quarter, with global trade tensions clouding the outlook.

Meanwhile, investors awaited fresh developments in trade talks, with countries looking to reach deals to avoid Trump's tariff blitz.

With excitement from the China-US detente fading, markets are seeking new catalysts.

Stock markets have surged past the levels seen before Trump's April 2 "Liberation Day" bombshell that hit countries worldwide with US tariffs.

Dealers are meanwhile turning their attention to hard economic data, hoping for an idea about the initial impact of Washington's trade policies.

After figures Tuesday showing US inflation came in a little below forecasts in April, eyes are on wholesale prices and retail sales due Thursday, as well as earnings from retail giant Walmart, a bellwether for US consumer spending trends.

However, analysts pointed out that the real impact would not be seen until May's figures are released and warned that there were still plenty of bumps in the road ahead.

- Key figures at around 1210 GMT -

West Texas Intermediate: DOWN 3.6 percent at $60.89 per barrel

Brent North Sea Crude: DOWN 3.4 percent at $63.84 per barrel

London - FTSE 100: UP 0.2 percent at 8,604.39 points

Paris - CAC 40: DOWN 0.2 percent at 7,821.01

Frankfurt - DAX: DOWN 0.1 percent at 23,513.50

Tokyo - Nikkei 225: DOWN 1.0 percent at 37,755.51 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 23,453.16 (close)

Shanghai - Composite: DOWN 0.7 percent at 3,380.82 (close)

New York - Dow: DOWN 0.2 percent at 42,051.06 (close)

Euro/dollar: UP at $1.1196 from $1.1178 on Wednesday

Pound/dollar: UP at $1.3286 from $1.3268

Dollar/yen: DOWN at 145.94 yen from 146.65 yen

Euro/pound: UP at 84.26 pence from 84.21 pence

dan-ajb/bcp/rl

Walmart

INDEX CORP.

Dow