Oil bounces from a sharp drop

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 per cent, at $116.57 a barrel by 1042 GMT after trading in an $8 range. The benchmark contract slumped 13 per cent in the previous session in its biggest daily drop in percentage terms for about two years.

US West Texas Intermediate (WTI) crude futures were up $4.49, or 4.1 per cent, at $113.19 after trading in a $7 range. The contract had tumbled 12 per cent 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 forecasts for oil prices up to $200 a barrel.

While oil from the world's second-largest exporter is being shunned over its invasion of Ukraine, comments from the United Arab Emirates energy minister and the its ambassador to Washington sent conflicting signals.

UAE Energy Minister Suhail al-Mazrouei said on Twitter that his country was commited to the agreement by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia to ramp up oil supply by only 400,000 barrels per day (bpd) monthly after sharp cuts in 2020.

Only hours earlier prices slumped on comments from UAE's ambassador to Washington, saying his country will be encouraging OPEC to consider higher output.