A sustained move under $53.61 will signal a good sellers showing a bull trap. This will likely trigger a labored break with potential targets coming in at $52.40, $51.29 and $50.66. If $50.66 fails as support then look for the selling to extend in the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate the presence of buyers. This can 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 often a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions have a significant effect on the globe oil market. Iran’s oil reserves will be the fourth largest in the world and they have a production capacity of approximately 4 million barrels per day, causing them to be the second largest producer in OPEC. Iran’s oil reserves are the cause of approximately 10% of the world’s total proven petroleum reserves, at the rate of the 2006 production the reserves in Iran could last 98 years. Almost certainly Iran will prove to add about 1 million barrels of oil a day towards the market and in line with the world bank this may result in the cut in the oil price by $10 per barrel the coming year.
Based on Data from OPEC, at the beginning of 2013 the biggest oil deposits have been in Venezuela being 20% of worldwide oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. As a result of characteristics from the reserves it’s not at all always very easy to bring this oil for the surface due to the limitation on extraction technologies and also the cost to extract.
As China’s increased requirement for gas main rather than fossil fuel further reduces overall interest in oil, the increase in supply from Iran along with the continuation Saudi Arabia putting more oil onto the market should understand the price drop over the next Yr and a few analysts are predicting prices will fall under the $30’s.
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