Oil prices tumbled while US and European stocks surged on Wednesday after days of market turmoil over Russia's invasion of Ukraine.

Wall Street pushed solidly higher, with the Dow gaining two percent, the S&P 500 winning more and the tech-heavy Nasdaq rising a whopping 3.6 percent, following double-digit drops in key oil contracts.

"Today's rally is based on the decline in oil prices, but we haven't yet seen the bottom in stock prices nor have we seen the highs in oil prices," Peter Cardillo of Spartan Capital Securities said.

In Europe, Frankfurt's benchmark DAX index and Paris's CAC 40 both soared by more than seven percent.

London's FTSE 100 closed the day 3.3 percent higher, following losses earlier in Asia.

CMC Markets analyst Michael Hewson attributed the gains to "comments from the Russian foreign ministry which stated that it would be better if their goals in Ukraine were achieved through talks."

Briefing.com analyst Patrick O'Hare said the rebound is an indication investors are feeling better about the prospects for peace in Ukraine, but "market participants should know by now, of course, that talk from Russia is cheap."

But OANDA analyst Craig Erlam told AFP the surge in European stocks is likely a "dead cat bounce" -- a market term referring to a rebound that briefly interrupts a prolonged downturn.

"We appear to be seeing a temporary corrective move," Erlam said, predicting the rebound would not last as Russia continues to wage war on Ukraine.

"The invasion is still happening, sanctions are still being imposed and oil prices are still high," he noted. "None of that is conducive with a sustainable stock market recovery."

Brent crude tumbled 12 percent to around $113 a barrel, still relatively high a day after the United States and Britain moved to ban imports of Russian crude as part of Western sanctions on Moscow.

EU nations, which receive roughly 40 percent of their natural gas and one quarter of their oil from Russia, opted to set a goal of cutting their Russian gas imports by two-thirds.

Brent spiked to $139 on Monday -- about $8 short of an all-time record -- in expectation of the US embargo, but CMC Markets' Hewson noted that the benchmark has failed to stick above $130.

"The inability to hold above here appears to have prompted a little bit of an unwind in positioning, with some profit taking," he said.

European natural gas prices languished far below this week's record peak, despite fears over the region's reliance on Russia.

Prices of crude oil have soared to near-record highs
Prices of crude oil have soared to near-record highs GETTY IMAGES NORTH AMERICA via AFP / David Ryder

Europe gas reference Dutch TTF slid 4.1 percent to 159.50 euros per megawatt hour, having leapt at the start of this week to an all-time high at 345 euros.

But oil prices could rocket higher if more nations slap sanctions on Russian crude, according to Bjornar Tonhaugen, head of oil markets at Rystad Energy.

"Market volatility is at an all-time high, with... the expectation that supply will further tighten due to restrictive sanctions on Russian energy from the West," he said.

Brent North Sea crude: DOWN 11.8 percent at $112.92 per barrel

West Texas Intermediate: DOWN 10.8 percent at $110.40

New York - Dow: UP 2.0 percent at 33,286.25 (close)

New York - S&P 500: UP 2.6 percent at 4,277.88 (close)

New York - Nasdaq: UP 3.6 percent at 13,255.55 (close)

EURO STOXX 50: UP 7.4 percent at 3,766.02 (close)

Frankfurt - DAX: UP 7.9 percent at 13,847.93 (close)

Paris - CAC 40: UP 7.1 percent at 6,387.83 (close)

London - FTSE 100: UP 3.3 percent at 7,190.72 (close)

Tokyo - Nikkei 225: DOWN 0.3 percent at 24,717.53 (close)

Hong Kong - Hang Seng Index: DOWN 0.7 percent at 20,627.71 (close)

Shanghai - Composite: DOWN 1.1 percent at 3,256.39 (close)

Euro/dollar: UP at $1.1067 from $1.0899 Tuesday