The price of oil has reversed sharp early losses as nervousness over a bailout plan in Cyprus abated.

By early afternoon in New York, benchmark oil for April delivery was down just 3 cents to $93.42 a barrel. It had dropped as low as $91.76.

Traders initially worried about possible fallout from a plan to pay for a bailout for cash-strapped Cyprus by slapping a tax on deposits in the country's banks.

Some bank customers withdrew as much of their cash as they could and the fear was the panic could spread to other countries and prompt capital flight from weaker EU economies.

Stock markets in Asia and Europe fell sharply. But as US markets recovered from an early decline, oil started to rise.

Natural gas rose again, building on a month-long run that has seen the price jump 23%. Futures gained 3 cents to $3.91 per 1,000 cubic feet.

Brent crude, used to price many kinds of oil imported by US refineries, was down 46 cents to $109.36 per barrel on the ICE Futures exchange in London.