Brent oil price rebounds 5% from slump

LONDON - Brent oil rebounded on Thursday, after tanking the previous day on hopes that the huge amounts of sanctions-hit Russian oil could be largely replaced by sourcing from elsewhere.

European benchmark Brent North Sea crude climbed 5.1 per cent to $116.80 per barrel in morning deals.

New York's WTI contract advanced 3.5 per cent to $112.58.

Both contracts had collapsed by more than 12 per cent in value on Wednesday, as traders also seized on a glimmer of hope for peace talks between key producer Russia and Ukraine.

Brent tumbled as low as $105.60, having hit a peak of $139 just two days before, as the Ukraine crisis continues to send shockwaves through markets.

The United Arab Emirates said on Wednesday it would urge fellow states in the oil producers' cartel of the Organisation of the Petroleum Exporting Countries to boost output, while US talks with massive producer Venezuela appeared to be making progress.

"Crude prices rebounded this morning after being whipsawed on various Russia headlines," said Markets.com analyst Neil Wilson.

"Brent and WTI plunged yesterday in a brutal reversal as the UAE indicated it could start pumping more oil and call on friends at OPEC to do more.

"Comments from Russian and Ukrainian officials also pointed towards a path to peace, but the situation on the ground is no different."

At the same time, Iraq has said it could lift output and nuclear talks with Iran were also showing signs of bearing fruit.

However, with the Ukraine war still raging and crude oil supplies still tight, expectations are for the commodity to maintain its price strength.

"Traders are still very much in a cautionary mode as it is not clear to them that the current change in momentum or shift in the direction of the oil trend will last," said AvaTrade analyst Naeem Aslam.