(raw materials / closing price /% change)

Light Crude 95.08 -0.48%

Gold 1,270.00 -0.02%

Brent crude rebounded from a 16-month low on speculation cease-fire talks between Russia and Ukraine will ease sanctions against the biggest energy exporter.

Russian President Vladimir Putin outlined a peace plan for Ukraine after agreeing with his Ukrainian counterpart Petro Poroshenko on steps toward a cease-fire in the conflict that has raged for more than five months. West Texas Intermediate rose on expectations supply dropped last week. Oil tumbled yesterday on concern a weakening European economy will curb demand.

"The markets are very much being swayed by the events in Europe and Ukraine," said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. The cease-fire talks "will hopefully stop the downward spiral we are seeing in the euro-zone economy and the worry about more sanctions being applied."

Brent for October settlement gained $1.68, or 1.7 percent, to $102.02 a barrel at 10:21 a.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures was 16 percent above the 100-day average. The contract closed yesterday at its lowest since May 1, 2013. The European benchmark traded at a premium of $7.75 to WTI on the ICE, compared with $7.46 yesterday.

WTI for October delivery advanced $1.39, or 1.5 percent, to $94.27 a barrel on the New York Mercantile Exchange. The contract fell yesterday to its lowest close since Jan. 14. Volume was about 4.8 percent below the 100-day average.

Gold prices updated 11-week low second consecutive session after reports that Ukraine and Russia agreed to a cease-fire in eastern Ukraine.

A day earlier, gold prices fell by 1.7% after positive manufacturing data the United States, released on Tuesday, reinforced the view that the economic recovery is gaining momentum, and raised expectations that the Fed will raise rates earlier than previously thought.

Gold hit session lows after the president of Ukraine Petro Poroshenko said that it has reached an agreement on "permanent ceasefire" in eastern Ukraine with Russian President Vladimir Putin.

However, a spokesman for President Putin later denied the statement of the ceasefire, as Russia is not a party to the conflict, but added that the two leaders "discussed how to end the conflict."

On Thursday, the market participants are expecting the results of the ECB policy meeting on the background of the increased expectations that the central bank will announce quantitative easing to shore up economic growth and stave off deflation.

Earlier today, the index of USD, which tracks the performance of the greenback versus a basket of six other major currencies, hit a 13-month high of 83.07 before the climb up to cut 82.93.

A strong dollar usually puts pressure on gold, as it reduces the metal's appeal as an alternative asset and increases in the price of dollar-denominated commodities for holders of other currencies.

The cost of the October gold futures on the COMEX today dropped to $ 1268.00, and then increased to $ 1279.00 per ounce.