A sustained move under $53.61 will signal the presence of sellers which indicates 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 use of buyers. This will likely also indicate that Friday’s move was fueled by fake buying rather and merely buy stops. The upside momentum will not continue and testing $54.98 is a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant effect on the planet oil market. Iran’s oil reserves are the fourth largest on the planet and they have a production capacity of around 4 million barrels every day, causing them to be the second largest producer in OPEC. Iran’s oil reserves are the cause of approximately 10% with the world’s total proven petroleum reserves, on the rate from the 2006 production the reserves in Iran could last 98 years. More than likely Iran will add about 1 million barrels of oil a day towards the market and based on the world bank this will likely resulted in the lowering of the crude oil price by $10 per barrel next year.
In accordance with Data from OPEC, at the start of 2013 the most important 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 in the reserves it is not always possible to bring this oil to the surface given the limitation on extraction technologies and also the cost to extract.
As China’s increased requirement for natural gas rather than fossil fuel further reduces overall need for oil, the increase in supply from Iran along with the continuation Saudi Arabia putting more oil on top of the market should begin to see the price drop within the next 12 months plus some analysts are predicting prices will belong to the $30’s.
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