Oil prices rebound on bargain hunting

Oil prices rebounded slightly on Thursday as investors went bargain hunting after New York crude slumped below $90 a barrel the previous day, analysts said. New York's main contract, West Texas Intermediate (WTI) crude for delivery in July was up 62 cents to $90.52 a barrel after dropping to $89.90 on Wednesday -- the lowest level since October. Brent North Sea crude for July meanwhile gained 20 cents to $105.76 in London midday deals after tumbling almost three dollars the previous day to a five-month low. Crude futures slumped on both sides of the Atlantic on Wednesday as the US currency rallied on eurozone debt worries, making dollar-denominated oil more expensive. "Prices have stopped sliding because some investors see this low level as a buy opportunity," said Victor Shum, an analyst at Purvin and Gertz international energy consultants. Singapore-based Shum added that prices were also supported by the threat of oil supply disruptions in the Middle East. "The prospect of supply disruptions is still there. The US and European Union embargoes on Iranian oil will still go ahead as planned despite the current talks," he said. Tough talks aimed at helping resolve the standoff between major producer Iran and the West over Tehran's nuclear programme entered an unscheduled second day Thursday in Baghdad, with both sides still at odds with each other. Major powers Britain, China, France, Russia and the United States plus Germany had tabled a proposal that included sweeteners to persuade Iran to abandon enriching uranium, but Tehran baulked at the offer. Iran has faced crippling sanctions over its nuclear programme, which much of the international community believe is masking a push to develop atomic weapons. Tehran has denied the claims, and has threatened to shut the Strait of Hormuz -- a major conduit for Gulf oil exports -- if further sanctions are imposed. Investors' attention was also on the eurozone debt crisis. EU leaders at a summit overshadowed by fears Greece could leave the euro pledged support Wednesday for Athens, as officials behind the scenes considered the doomsday scenario of an exit. "For now the top of the mind issue is still Greece, the main reason why oil took a pounding overnight," said Shum.