Oil prices rebounded more than 1% on Tuesday on a technical rebound and dip buying after the previous session's decline on OPEC+'s decision to accelerate output increases, although concerns about the market surplus outlook persisted.

Brent crude was up 92 cents at $61.15 a barrel by 0309 GMT, while U.S. West Texas Intermediate crude was up 89 cents at $58.02 a barrel.

Both benchmarks had settled at their lowest levels since February 2021 on Monday, boosted by OPEC+'s decision over the weekend to further accelerate oil output increases for a second straight month.

"Today's modest rebound in oil prices appears more technical than fundamental," said Yeap Jun Rong, market strategist at IG. "Persistent headwinds including a significant shift in OPEC+'s production strategy, uncertain demand amid U.S. tariff risks, and a downgrade in price forecasts continue to weigh on broader price action."

Driven by expectations that production will outpace consumption, oil has lost more than 10% in six straight sessions and is down more than 20% since April when U.S. President Donald Trump's tariff shock prompted increased bets on a global economic slowdown.

The return of Chinese market players after a five-day public holiday since May 1 was seen supporting prices on Tuesday.

"China is also reopening today, and as the biggest importer, buyers are likely to scramble to secure oil at current low levels," said Priyanka Sachdeva, senior market analyst at Phillip Nova.

Also providing support was data showing a pick-up in the services sector in the U.S., the world's top oil consumer, as orders picked up. The Institute for Supply Management (ISM) said on Monday its non-manufacturing purchasing managers' index (PMI) rose to 51.6 last month from 50.8 in March. Economists polled by Reuters had forecast the services PMI falling to 50.2.

The U.S. Federal Reserve is likely to leave interest rates unchanged on Wednesday as tariffs rattled the economic outlook.

Barclays on Monday lowered its Brent crude forecast 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 rising trade tensions and OPEC+'s shift in its production strategy. (Newsmaker23)

Source: Reuters