A sustained move under $53.61 will signal the presence of sellers which indicates 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 then look for the supplying extend to the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate a good buyers. This can also indicate that Friday’s move was fueled by fake buying rather and just buy stops. The upside momentum won’t continue and testing $54.98 can be a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant effect on the entire world oil market. Iran’s oil reserves will be the fourth largest on the planet with a production capacity around 4 million barrels every day, causing them to be the second largest producer in OPEC. Iran’s oil reserves account for approximately 10% of the world’s total proven petroleum reserves, with the rate with the 2006 production the reserves in Iran could last 98 years. More than likely Iran will prove to add about One million barrels of oil every day for the market and in line with the world bank this will resulted in decline in the oil price by $10 per barrel next season.
Based on Data from OPEC, at the outset of 2013 the greatest oil deposits are in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics in the reserves it’s not at all always possible to bring this oil on the surface in the limitation on extraction technologies as well as the cost to extract.
As China’s increased need for gas main as an alternative to fossil fuel further reduces overall requirement for oil, the increase in supply from Iran and also the continuation Saudi Arabia putting more oil to the market should begin to see the price drop on the next 1 year and several analysts are predicting prices will fall into the $30’s.
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