Oil prices gained more than $1.50 per barrel on Tuesday, rebounding after a decision by OPEC+ to boost output had caused a price decline in the previous session.
Brent crude futures rose by $1.80, or 3%, to $62.03 per barrel, marking the first gain after six consecutive declines. U.S. West Texas Intermediate crude also added $1.81, or 3.2%, to $58.94 per barrel.
Both benchmarks had reached their lowest levels since February 2021 on Monday, following an OPEC+ decision to accelerate oil production hikes for a second consecutive month. The rebound was unexpected, with many attributing the rise to technical factors and bargain hunting after prices dropped below $60 per barrel, which is seen as a psychological threshold for market participants.
Concerns about a market surplus persist, fueled by expectations that oil production will exceed consumption. The recent price drop, which has seen oil lose more than 10% over six straight sessions and fall more than 20% since April, has been driven by fears of a global economic slowdown following U.S. tariff hikes.
The return of Chinese market participants after a five-day public holiday also contributed to the price rebound, as China is the world’s largest oil importer. Additionally, Saudi Arabia’s official selling prices, which were cut modestly, provided some support to oil prices.
In the U.S., data showed a rise in services sector growth, as the non-manufacturing purchasing managers index increased to 51.6 in April, from 50.8 in March. This pickup in activity also helped to support prices.
Despite the rebound, concerns remain about the impact of OPEC+ production strategies, U.S. tariffs, and overall market demand on oil prices, with analysts warning that the broader price movement continues to be weighed down by these persistent challenges.
