Oil climbed toward $39 a barrel on Tuesday as investors took a fresh look at OPEC's greater than expected success in cutting supplies.
The Wall Street plunge to a 12 year low on Monday had overshadowed figures from Petrologistics that OPEC producers were likely to pump less oil in February than January.
U.S. shares were trading higher on Tuesday as investors snapped up beaten-down shares.
A Reuters calculation based on the consultant's figure showed OPEC delivered on 89 percent of the agreed supply cutbacks promised since last year.
"The OPEC compliance was bigger than expected," said Oliver Jakob with Petromatrix. "Yesterday it was overlooked because of the meltdown on the Wall Street."
U.S. crude oil was trading 18 cents higher at $38.62 a barrel by 11:03 a.m. EDT after falling as low as $37.65.
London Brent crude was 81 cents up at $41.28.
Some market participants expect OPEC, the source of more than a third of global oil supply, to decide on another supply cut at a meeting in March as demand falls. Oil prices are down by $110 from their peak in July last year.
Several OPEC members have already suggested the producer group would decide to cut supply again.
Some analysts said, however, oil prices might get dragged down by the global economic recession.
Global markets were closely watching Federal Chairman Ben Bernanke's policy report to the U.S. Congress on new bank rescue programs and President Barack Obama's 2010 fiscal year budget proposal to a joint session of Congress later on Tuesday.
Bernanke said in testimony the economy was in a "severe contraction" and warned that the U.S. recession may not end this year unless government efforts to restore financial stability succeeded.
"The global financial crisis is still at hand, making oil prices drift lower along with other commodities," said Victor Say, an analyst at Informa Global Markets.
"The economic data is not at all rosy, and if nothing comes out of the U.S. on plans to rescue the banks in the next couple of days, oil prices will go down, probably even below $36."
Oil traders are eyeing U.S. oil inventory data on Wednesday, which is likely to show a 1.9 million barrel increase in crude stocks last week, a preliminary Reuters poll showed.
