OPEC
The logo of the Organization of the Petroleum Exporting Countries (OPEC) inside its headquarters in Vienna, Austria, December 7, 2018.
(Photo: REUTERS/Leonhard Foeger/File Photo)

Prices of oil made a solid comeback early Tuesday, buoyed by reports that production levels at the world's biggest oil refineries dropped in the last six months, though demand worries and resumption at Saudi Arabia's oil fields kept a lid on global prices.

Crude futures for December Brent was up 51 cents per barrel early Tuesday, while US West Texas Intermediate (WTI) crude for November delivery surged 52 cents per barrel. Prices for both oil contracts reported their biggest quarterly declines Monday, hampered by a weakening in world economic growth as China and the US try to iron out their trade differences.

According to Jeffry Haley, Asia-Pacific senior economic analyst at OANDA Singapore, the Asian region has witnessed a good amount of profit-taking from short-term finance and bargain-hunters. Any sort of advances are likely to be met with sellers as a laggard global market - and the recovery of Saudi Arabia's lost production - "far outweigh any Middle East risk factors at the moment," he said.

Analysts expect oil prices to remain unchanged, with Brent averaging $65.19 per barrel and the US West Texas Intermediate pegged at $57.95 so far this year, as flagging demand outstrip disruptions in global supply, a research conducted by Reuters showed.

Saudi Aramco has restored full oil production to levels they were previously at prior to the drone attacks on its refineries on Sept. 14, the company said on Monday. Saudi Arabia has produced almost 10 million barrels a day for the month of August.

Still, the total production of the Oil Petroleum Exporting Countries was down to its lowest mark in eight years at 28.7 million barrels a day, way below 750,000 BPDs from last month's adjusted volume and the lowest total in a month since a decade ago, Reuters stated.

Production numbers registered by two of the biggest oil producers in the world - the US and Russia - likewise dropped in the months of July and September. Russia's oil output declined to 11.23 million BPD for the Sept. 1-29 period, down from 11.28 million BPD in the previous month, analysts said, although this figure is still above the required figures for an output agreement between OPEC and Moscow.

Meanwhile, US crude oil reserves grew more than a million barrels in the last seven days, while distillate deposits were down, the initial Reuters survey showed.