Oil Prices Rebound Slightly After Big Drop Due to OPEC + Production Hike

Oil prices saw a modest rebound of over 1% on Tuesday after falling sharply the previous day. The recovery was mainly due to technical buying as traders took advantage of lower prices. Monday’s decline followed OPEC+’s decision to further increase oil production, which raised concerns about an oversupply in the market.

By early Tuesday morning (0309 GMT), Brent crude futures had gone up by 92 cents, reaching $61.15 per barrel. At the same time, US West Texas Intermediate (WTI) crude rose by 89 cents to $58.02 per barrel.

Both prices had dropped to their lowest levels since February 2021 just a day earlier. The drop was driven by OPEC+’s weekend announcement to speed up production hikes for the second month in a row.

Yeap Jun Rong, a market strategist at IG, said, “Today’s slight rebound in oil prices appears more technical than fundamental. The market is still facing strong headwinds like OPEC+’s changing production strategy, uncertainty in demand due to US tariffs, and lower price forecasts.”

Since April, oil prices have dropped more than 20%, including a 10% fall in just six sessions, as fears of a global economic slowdown grew following US President Donald Trump’s new tariff policies.

Tuesday’s small recovery was also supported by the return of Chinese markets after a five-day holiday starting May 1. China, being the world’s largest oil importer, likely increased purchases while prices were low.

Priyanka Sachdeva, a senior market analyst at Phillip Nova, said, “With China reopening, buyers likely jumped to secure oil at the current low levels.”

Additional support came from positive US economic data, which showed a rise in the services sector, signaling healthy demand in the world’s largest oil-consuming country.

Despite this bounce, the outlook remains cautious. Barclays cut its Brent crude forecast by $4 on Monday, setting a 2025 target of $70 per barrel and a 2026 forecast of $62 per barrel. The bank cited ongoing trade tensions and changes in OPEC+’s strategy as the main reasons.