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Oil prices rebounded over 1.0 per cent on Tuesday with technical rebound and dip buying after a drop in prior session by OPEC+ decision to accelerate increases in output, although concerns about the market surplus outlook persisted.
Brent crude futures rose 92 cents to $61.15 a barrel by 0309 GMT, while US West Texas Intermediate crude added 89 cents to $58.02 a barrel, reports Reuters.
Both benchmarks had settled at their lowest since February 2021 on Monday, driven by an OPEC+ decision over the weekend to further speed up oil production hikes for a second consecutive month.
"Today’s slight rebound in oil prices appears more technical than fundamental," said Yeap Jun Rong, a market strategist at IG. "Persistent headwinds including a pivotal shift in OPEC+ production strategy, uncertain demand amid US tariff risks, and price forecast downgrades are continuing to weigh on the broader price movement."
Driven by expectations that production will exceed consumption, oil has lost over 10% in six straight sessions and dipped over 20% since April when US President Donald Trump's tariff shocks prompted increased bets on a slowdown in the global economy.
The return of Chinese market participants after a five-day public holiday since May 1 was seen supporting prices on Tuesday.
"China also reopened today, and being the largest importer, buyers would have likely jumped to secure oil at current low levels," said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Also lending some support was data showing a pick-up in services sector's growth in the US, the world's major oil consumer, as orders increased.
The Institute for Supply Management (ISM) said on Monday its nonmanufacturing purchasing managers index (PMI) increased to 51.6 last month from 50.8 in March. Economists polled by Reuters had forecast the services PMI dipping to 50.2.
The US Federal Reserve will likely leave interest rates unchanged on Wednesday as tariffs roil the economic outlook.
Barclays lowered its Brent crude forecast on Monday by $4 to $70 a barrel for 2025 and set its 2026 estimate at $62 a barrel, citing "a rocky road ahead for fundamentals" amid escalating trade tensions and OPEC+'s pivot in its production strategy.