By Anna Hirtenstein
LONDON (Reuters) -Oil gained more than $1.50 per barrel on Tuesday, rebounding on technical factors and bargain hunting after a decision by OPEC+ to boost output sent prices down in the previous session, although concerns about a market surplus persisted.
Brent crude futures were up $1.80, or 3%, to $62.03 a barrel by 1310 GMT, the first gain after six consecutive declines, while U.S. West Texas Intermediate crude added $1.81, or 3.2%, to $58.94 a barrel.
Both benchmarks had settled at their lowest levels 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.
“It’s rather surprising that we got this rebound this morning,” said Bjarne Schieldrop, chief commodities analyst at SEB. “But $60 (a barrel) is a psychological line. When oil drops down below $60, you get people saying ‘alright this is a great price.'”
Driven by expectations that production will exceed consumption, oil has lost more than 10% in six straight sessions and dipped more than 20% since April when U.S. 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 also 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.
Saudi Arabia’s latest official selling prices for its oil, which Reuters reported on Monday, also lent some support to oil, according to Giovanni Staunovo, commodities analyst at UBS. The prices were cut modestly.
“They don’t show much of a fight for market share. It’s still a modest unwinding of the (OPEC+) cuts,” Staunovo said. “This will have readjusted some expectations.”
Data on Monday showed a pick-up in services sector growth in the U.S., the world’s major oil consumer, as orders increased.
The Institute for Supply Management said its non-manufacturing purchasing managers index increased to 51.6 last month from 50.8 in March. Economists polled by Reuters had forecast the services PMI would dip to 50.2.
The U.S. Federal Reserve is widely expected to leave interest rates unchanged on Wednesday as tariffs roil the economic outlook.
“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 U.S. tariff risks, and price forecast downgrades are continuing to weigh on the broader price movement.”
(Reporting by Anna Hirtenstein in London; Additional reporting by Enes Tunagur in London and Siyi Liu in Singapore; Editing by Muralikumar Anantharaman, Lincoln Feast, Sharon Singleton and Paul Simao)
