Jump in oil sends Europe shares down

European shares fell by more than two percent this afternoon, driven lower by sliding bank shares and by a sudden surge in the price of crude oil after US inventory data.

Banks were the worst performers in Europe, weighed down by renewed worries about the damage from the credit crunch on corporate balance sheets. Royal Bank of Scotland lost 6.4 percent, UBS fell 6.5 percent and BNP Paribas shed 5.2 percent.

Crude oil futures jumped by about $2 to hit a session high of $115.69 a barrel after weekly inventory data showed a larger than expected draw-down in stocks.

This sent the FTSEurofirst 300 index of top European shares down 2.2 percent to 1,181.94 points by 1447 GMT and put US stocks under pressure.