The prospect of higher oil output slammed crude prices yesterday, lifting the US dollar and weighing on energy shares, while political upheaval in Europe and uncertainty over a US-North Korea summit restrained equity markets and boosted bond prices.

Crude oil prices declined more than three per cent after Saudi Arabia and Russia said they were ready to ease supply curbs that have pushed prices to their highest since 2014.

Pyongyang gave a measured response to Mr Trump’s decision to cancel the meeting, with Vice Foreign Minister Kim Kye Gwan expressing hope for a “Trump formula” to resolve the standoff over its nuclear programme.

The remarks prompted Trump on Friday to dangle the possibility that the June 12 summit with North Korea’s leader Kim Jong Un might still happen.

Wall Street opened lower as slumping oil prices dragged on energy stocks ahead of a holiday weekend in the United States, which typically leads to low volume.

The Dow Jones Industrial Average fell 30.9 points, or 0.12 per cent, to 24,780.86, the S&P 500 lost 4.67 points, or 0.17 per cent, to 2,723.09 and the Nasdaq Composite added 16.94 points, or 0.23 per cent, to 7,441.37.

Shares of Exxon and Chevron each fell more than two per cent, while service firms Schlumberger, Halliburton and producers Occidental Petroleum and ConocoPhillips were down between three per cent and 4.2 per cent.

US Treasury yields fell to their lowest level in three weeks as concerns about Italy’s new government and a leadership changed in Spain boosted appetite for low-risk investments.

The pan-European FTSE-urofirst 300 index rose 0.04 per cent and MSCI’s gauge of stocks across the globe shed 0.23 per cent.

While yields on German and US bonds fell amid the uncertainty, there have been few signs of a wide-ranging sell-off in higher-risk assets – Wall Street's volatility index stayed near four-month lows.

The dollar index rose 0.48 per cent, with the euro down 0.54 per cent to $1.1656.

The dollar has rebounded after touching two-week lows versus a basket of currencies on Thursday, helped by gains against commodity-linked currencies, as oil prices fell.

The Japanese yen weakened 0.11 per cent versus the greenback at 109.41 per dollar, 1.3313reversing gains seen after the summit cancellation, down 0.49 per cent.

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