What Will It Take for Oil Prices to Rally Back Above $71.02?

Light Crude Oil futures came under significant selling pressure this week, breaching key support levels and intensifying bearish sentiment.

After breaking through the $71.02-$73.44 zone, prices dipped below $69.50, marking a critical technical breakdown. This decline leaves the market vulnerable, with $63.21 now appearing as the next significant downside target on the weekly chart.

OPEC+ Delays Production Hike

OPEC+ added to market uncertainty by delaying its planned production increase of 180,000 barrels per day (bpd), initially scheduled for October. The decision to delay output comes amid concerns over fragile demand conditions, particularly with weakening consumption in major markets like China. While the delay provided brief support to prices, it failed to halt the overall bearish momentum. The market remains focused on demand challenges rather than supply constraints, leaving crude prices under pressure. OPEC+ faces a difficult balancing act as it assesses market conditions against its production goals.

Demand Weakness from China

China’s economic troubles continue to be a major headwind for oil prices. Recent data from China’s manufacturing sector, which fell to a six-month low, alongside broader economic struggles in its property and export markets, have further dampened the outlook for oil demand from the world’s largest importer. While China’s oil imports briefly picked up in August.