Oil prices climbed over 2.5% on Tuesday after falling for six straight sessions. The rebound followed technical indicators suggesting the recent selloff was overdone, prompting bargain hunting as prices dipped into psychologically and technically significant zones.
The market's recent weakness stemmed largely from OPEC+’s decision to accelerate output hikes, sparking fears of oversupply. Monday’s declines pushed both Brent and WTI to their lowest levels since February 2021, down more than 10% in just six sessions and over 20% since April.
Analysts said the $60 mark for Brent acted as a psychological trigger for buyers. Reopening of Chinese markets after a holiday also helped demand, with China remaining the world’s top crude importer. Saudi Arabia’s modest cuts to official selling prices, rather than aggressive discounts, further stabilized sentiment.
Meanwhile, U.S. data offered mixed signals: growth in the services sector improved slightly in April, and Diamondback Energy trimmed its full-year production outlook, anticipating a 10% drop in active U.S. rigs by late Q2—potentially tightening supply outside OPEC.
Despite the rebound, bearish factors persist. Uncertainty over global demand, driven by U.S.–China trade tensions, and a strategic shift by OPEC+ continue to weigh on the outlook. Both Barclays and Goldman Sachs lowered their oil price forecasts, citing rising supply and economic risks.