World oil prices rose on Thursday as investors snapped up bargain crude after slumping the previous day on concerns over the US "fiscal cliff" and European debt, analysts said.

Brent North Sea crude for delivery in December won 27 cents to $US107.09 a barrel in late afternoon trade.

New York's main contract, light sweet crude for December or West Texas Intermediate (WTI), increased by 74 cents to $US85.18 per barrel.

Crude futures had plunged by more than $US4 a barrel Wednesday, giving up Tuesday's sharp gains and more, as markets also reacted to gloomy EU economic forecasts.

"We had quite a large move down (Wednesday) as the worries over the fiscal cliff and European woes started to more than usurp the euphoria" over the re-election of President Barack Obama, Jason Hughes, head of premium client management for IG Markets Singapore told AFP.

He added: "Prices have pushed back up... it's probably people covering positions after a big move."

Wednesday's sell-off came a day after the US election gave Obama four more years in office, with some worries evident over the potential for more policy deadlock as the extremely austere "fiscal cliff" spending cuts and tax hikes loom.

"The enthusiasm over the outcome of the US election has quickly given way to a more sombre mood," added Commerzbank analyst Carsten Fritsch.

"Hopes that the ultra-expansionary monetary and fiscal policy would be continued have been replaced by fears that the forthcoming fiscal cliff negotiations could fail."