What will it take for oil prices to get back above $71.02?

Weekly Recap and Forecast: Light Crude Oil Futures

Crude oil futures have come under significant selling pressure this week, breaching key support levels and intensifying bearish sentiment. After breaking through the $71.02-$73.44 area, prices dropped below $69.50, marking a critical technical breakdown. This decline leaves the market vulnerable, with $63.21 now emerging as the next significant downside target on the weekly chart.

OPEC+ postpones production increase

OPEC+ added to market uncertainty by delaying a planned production increase of 180,000 barrels per day (bpd), originally scheduled for October. The decision to delay production comes amid concerns about fragile demand conditions, particularly with declining consumption in major markets such as 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 oil prices under pressure. OPEC+ faces a difficult balancing act as it assesses market conditions against its production targets.

Demands weakness from China

China’s economic woes continue to be a major headwind for oil prices. Recent data from China’s manufacturing sector, which fell to a six-month low, along with broader economic struggles in its housing and export markets, further dampened the outlook for oil demand from the country’s biggest importer. world. While China’s oil imports rose briefly in August,…

Weekly Recap and Forecast: Light Crude Oil Futures

Crude oil futures have come under significant selling pressure this week, breaching key support levels and intensifying bearish sentiment. After breaking through the $71.02-$73.44 area, prices dropped below $69.50, marking a critical technical breakdown. This decline leaves the market vulnerable, with $63.21 now emerging as the next significant downside target on the weekly chart.

OPEC+ postpones production increase

OPEC+ added to market uncertainty by delaying a planned production increase of 180,000 barrels per day (bpd), originally scheduled for October. The decision to delay production comes amid concerns about fragile demand conditions, particularly with declining consumption in major markets such as 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 oil prices under pressure. OPEC+ faces a difficult balancing act as it assesses market conditions against its production targets.

Demands weakness from China

China’s economic woes continue to be a major headwind for oil prices. Recent data from China’s manufacturing sector, which fell to a six-month low, along with broader economic struggles in its housing and export markets, further dampened the outlook for oil demand from the country’s biggest importer. world. While China’s oil imports rose briefly in August, the overall picture remains one of weak demand. This added to concerns that the global market could face an oversupply problem if demand does not recover soon.

US demand falls amid seasonal factors

In the US, oil demand has fallen as the summer season draws to a close. In addition, the start of the fall refinery maintenance period in both the US and Europe reduced crude oil consumption. This seasonal slowdown in demand coincides with greater concern about the US economy and oil consumption, contributing to the bearish outlook for prices. Despite a larger-than-expected fall in US crude inventories last week – by 7.431 million barrels – this failed to provide lasting support for prices. Destocking provided only temporary relief, and the market quickly refocused on the broader issue of falling demand.

Bear market sentiment and outlook

Overall, the outlook for crude oil futures remains bearish. With prices trading below critical weekly support levels and global demand showing no sign of significant recovery, the market is set for further decline. The failure to hold above $69.50 suggests that a test of $66.66 is likely in the near term, with the potential for a move to $63.21 if the bearish trend continues.

Key resistance levels at $71.02 and $73.44 are expected to cap any near-term upside, while the broader technical picture indicates that prices are vulnerable to further declines. Delayed OPEC+ production increases and stockpiles, while supportive in the short term, are not enough to offset weak demand from China and the US.

Weekly light crude oil futures

Trend indicator analysis

The main trend is down. It declined this week when $69.50 failed as support. The trend will change higher to $81.94. As of Thursday’s close, the market is trading lower for the week, putting it in position to extend its four-week losing streak.

The long-term range is $89.44 to $63.21. The market is currently trading on the bearish side of its 50% level at $76.32.

The medium-term range is $63.21 to $83.66. Its retracement zone from $71.02 to $73.43 is resistance.

Weekly technical forecast

The direction of the weekly light crude oil futures market at the end of the week of September 13 will likely be determined by the trader’s reaction to the Fibonacci level at $71.02.

The optimistic scenario

A sustained move above $71.02 will signal the presence of strong buyers. If this creates enough short-term momentum, then we could see a rally to the 50% level at $73.43.

Bearish scenario

A sustained move below $71.02 will indicate the presence of sellers. If bearish traders continue to defend this area, we could see a short-term break at $63.21. Whether the market accelerates downward or steps lower will be determined by selling volume and volatility.

Market Outlook: Bearish outlook prevails

Without a significant recovery in demand or an unexpected supply disruption, crude oil prices are likely to remain under pressure. The short-term outlook is bearish, with traders bracing for continued volatility. A lack of improvement in demand, particularly from China, could lead to further declines. The market is expected to remain range-bound with a downward trend unless there is a significant change in fundamentals. Crude oil futures currently face the risk of continued price weakness.