A sustained move under $53.61 will signal a good sellers indicating a bull trap. This may trigger a labored break with potential targets weighing $52.40, $51.29 and $50.66. If $50.66 fails as support discover the selling to extend in to the main retracement zone at $50.28 to $48.83.
A sustained make room $54.00 will indicate the use of buyers. This will likely also indicate that Friday’s move was fueled by fake buying rather and buy stops. The upside momentum will not continue and testing $54.98 is a fantasy for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant impact on the entire world oil market. Iran’s oil reserves include the fourth largest on earth with a production capacity of approximately 4 million barrels per day, which makes them the second biggest producer in OPEC. Iran’s oil reserves take into account approximately 10% from the world’s total proven petroleum reserves, with the rate from the 2006 production the reserves in Iran could last 98 years. Probably Iran will prove to add about One million barrels of oil a day for the market and according to the world bank this can resulted in decline in the oil price by $10 per barrel the coming year.
According to Data from OPEC, at the start of 2013 the most important oil deposits have been in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics of the reserves it’s not at all always possible to bring this oil towards the surface given the limitation on extraction technologies and the cost to extract.
As China’s increased requirement for natural gas as an alternative to fossil fuel further reduces overall requirement for oil, the rise in supply from Iran and also the continuation Saudi Arabia putting more oil onto the market should understand the price drop over the next 12 months and some analysts are predicting prices will get into the $30’s.
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