Oil rebounded from four-year lows on US output cuts and demand hopes
The rally followed a report from Diamondback Energy Inc., the largest independent producer in the Permian Basin, which trimmed its full-year output forecast and warned of an impending decline in US shale production.
Crude oil prices surged over 3% on Tuesday, 6 May 2025, recovering from four-year lows seen in the previous session, buoyed by indications of strengthening demand in Europe and China, a slowdown in US production, and renewed geopolitical tensions in the Middle East.
Brent rose $1.92, or 3.2%, to settle at $62.15 a barrel.
WTI gained $1.96, or 3.4%, to close at $59.09 a barrel.
The rally followed a report from Diamondback Energy Inc., the largest independent producer in the Permian Basin, which trimmed its full-year output forecast and warned of an impending decline in US shale production. A drop in US crude supply would provide a partial offset to the global surplus expected to build this year as OPEC and its allies ramp up production more rapidly than previously anticipated.
Markets also reacted to broader macroeconomic signals, including progress in international trade discussions and the pricing-in of geopolitical risk premiums amid escalating tensions in the Middle East.