A halt in this week's rally in oil prices held back European stocks and pushed German Bund yields below 0.20 percent on Friday as worries about the global economic outlook lingered on.
The renewed aversion to risky assets pushed the Japanese yen to 2 1/2-year high against the euro. Sterling held steady as talks for a changes in Britain's European Union membership dragged on through the night.
Brent futures were little changed at $34.27 a barrel after ending the previous day down 22 cents. A record buildup in U.S. crude stockpiles stoked concern about global oversupply, outweighing moves by oil producers, including Saudi Arabia and Russia, to cap oil output.
The pan-European FTSEurofirst 300 was down 0.38 percent at 1,289.03 points. In spite of the decline, the index was on course for its best week since January 2015. Britain's FTSE 100 was down 0.1 percent.
The declines track losses in Asian shares, which slipped from near three-week highs. Assets perceived as safe havens did well, with German 10-year Bund yields falling 2 basis points to 0.19 percent. Ten-year U.S. T-note yields US10YT=RR also fell 2 basis points, to 1.74 percent.
"The recovery in risk markets is still fragile," said BNP Paribas rate strategist Patrick Jacq.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent and Japan's Nikkei dropped 1.4 percent. On the week, however, they were up about 4 percent and 7 percent, respectively.
The weekly performance came after gains by oil eased some of the deflation concern in the developed world.
Oil prices rose more than 14 percent in the three days to Thursday after Saudi Arabia and Russia, supported by other exporters, including Venezuela and Iraq, moved to freeze oil output at January's levels. Iran endorsed the plan without commitment on Wednesday.
If approved, it would be the first such agreement in 15 years among the Organization of the Petroleum Exporting Countries and non-OPEC members.
Iraqi Oil Minister Adel Abdul Mahdi said on Thursday that talks would continue between OPEC and non-OPEC members to find ways to restore "normal" oil prices.
But data showing U.S. crude inventories rose by 2.1 million barrels last week, to a peak of 504.1 million barrels, the third week of record highs in the past month, holding prices down.
At the EU summit, British Prime Minister David Cameron urged EU leaders to agree a deal that would allow him to campaign in a June referendum to stay in the EU. Fellow leaders and diplomats said an agreement seemed possible by the end of a two-day summit on Friday, but some said outstanding issues were proving tough to crack, holding up the process.
Sterling was down 0.1 percent against the dollar GBP=D4.
"By the end of today, we should have a decent idea whether the UK is set to have a referendum on EU membership this year," said Simon Smith, chief economist at FxPro. "This matters for sterling, which has certainly shown strong signs of concern so far this year."
The yen EURJPY=R reached its strongest since June 2013 against the euro at 125.33. The dollar was down 0.15 percent against a basket of major currencies.
Spot gold XAU= eased 0.5 percent to $1,225.43 an ounce, after gaining 2 percent on Thursday. For the week, it has lost 1 percent, as traders took profits after the metal climbed to a one-year top last week.