A sustained move under $53.61 will signal the use of sellers showing a bull trap. This will trigger a labored break with potential targets coming in at $52.40, $51.29 and $50.66. If $50.66 fails as support arehorrified to find that the selling to extend in the main retracement zone at $50.28 to $48.83.
A sustained make room $54.00 will indicate a good buyers. This will likely also indicate that Friday’s move was fueled by fake buying rather and simply buy stops. The upside momentum won’t continue and testing $54.98 is a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions will have a significant effect on the world oil market. Iran’s oil reserves will be the fourth largest in the world and they have a production capacity of around 4 million barrels each day, which makes them the second largest producer in OPEC. Iran’s oil reserves take into account approximately 10% in the world’s total proven petroleum reserves, at the rate in the 2006 production the reserves in Iran could last 98 years. Probably Iran will add about 1 million barrels of oil every day on the market and in line with the world bank this will likely result in the cut in the oil price by $10 per barrel next year.
Based on Data from OPEC, at the beginning of 2013 the largest oil deposits will be in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Because of the characteristics of the reserves it is not always very easy to bring this oil to the surface because of the limitation on extraction technologies and the cost to extract.
As China’s increased requirement for natural gas instead of fossil fuel further reduces overall need for oil, the increase in supply from Iran and the continuation Saudi Arabia putting more oil to the market should begin to see the price drop over the next Twelve months and some analysts are predicting prices will fall under the $30’s.
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