FX.co ★ Oil Prices Jump After Recent Dip

WTI crude oil futures experienced a 4% increase on Tuesday, reaching $59.4 per barrel, as the market rebounded from its lowest point in four years. This rise was driven by technical indicators suggesting that the market was oversold, attracting bargain hunters. Additional support came from the return of Chinese buyers after a holiday period. Furthermore, there are signs indicating a potential slowdown in U.S. shale production, which helped alleviate concerns of oversupply. This was underscored by Diamondback Energy, a leading producer in the Permian Basin, which revised its output forecast downwards and cautioned about a likely decline in onshore drilling activities. Another major shale company announced reductions, highlighting the impact of low prices on production levels. Meanwhile, Saudi Arabia's slight decrease in official selling prices reflected a cautious approach to maintaining market share, easing bearish sentiments following the OPEC+ decision to increase output in June. Additionally, a stronger-than-anticipated U.S. services PMI reading suggested that underlying demand remains resilient.