Oil prices experienced a significant rebound on Tuesday, with Brent crude futures rising by $1.67, or 2.8%, to $61.90 per barrel, marking the first gain after six consecutive declines. Similarly, U.S. West Texas Intermediate crude increased by $1.61, or 2.8%, to $58.74 per barrel.
The uptick is attributed to technical factors and bargain hunting, following a period where prices had settled at their lowest since February 2021. The recent decline was driven by OPEC+'s decision to accelerate oil production hikes for a second consecutive month, raising concerns about market oversupply.
Despite the rebound, analysts caution that oversupply worries persist, fueled by expectations that production will exceed consumption. The oil market has lost over 10% in six straight sessions and dipped over 20% since April, amid fears of a global economic slowdown following U.S. tariff implementations.
Additional support for the price increase came from the return of Chinese market participants after a five-day public holiday, leading to increased buying activity. Furthermore, data indicating growth in the U.S. services sector contributed to the positive sentiment.
While the current rebound offers a respite, market observers remain vigilant, noting that the fundamental issues affecting oil prices, such as supply-demand imbalances and geopolitical tensions, continue to pose challenges.
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