Oil bounces as tight supply gives high floor to prices | Reuters

Oil bounces as tight supply gives high floor to prices | Reuters

Oil prices bounced on Thursday from a sharp drop in the previous session after the United Arab Emirates backtracked on statements saying that OPEC and its allies might increase output to help to plug the gap in exports from Russia.

In a volatile market, Brent crude futures were up $5.43, or 4.9%, at $116.57 a barrel by 1042 GMT after trading in an $8 range. The benchmark contract slumped 13% in the previous session in its biggest daily drop in percentage terms for about two years.

U.S. West Texas Intermediate (WTI) crude futures were up $4.49, or 4.1%, at $113.19 after trading in a $7 range. The contract had tumbled 12% in the previous session in the biggest daily decline since November.

PVM oil market analyst Tamas Varga called Wednesday's slump a "temporary correction".

Uncertainty over where and when supply will come from to replace crude from Russia has led to wide-ranging forecasts for oil prices up to $200 a barrel.