A sustained move under $53.61 will signal a good sellers showing a bull trap. This may 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 supplying extend into the main retracement zone at $50.28 to $48.83.
A sustained make room $54.00 will indicate the presence of buyers. This will likely 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 is often a fantasy for buyers from fuelled trade talks.
Lifting Iranian sanctions have a significant effect on the globe oil market. Iran’s oil reserves include the fourth largest on the globe and they’ve a production capacity of about 4 million barrels every day, driving them to the second largest producer in OPEC. Iran’s oil reserves are the cause of approximately 10% from the world’s total proven petroleum reserves, with the rate in the 2006 production the reserves in Iran could last 98 years. Most likely Iran will prove to add about 2million barrels of oil a day for the market and in accordance with the world bank this will likely lead to the decline in the crude oil price by $10 per barrel pick up.
Based on Data from OPEC, at the outset of 2013 the greatest oil deposits will be in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Because of the characteristics from the reserves it’s not always possible to bring this oil towards the surface given the limitation on extraction technologies and the cost to extract.
As China’s increased interest in natural gas as an option to fossil fuel further reduces overall interest in oil, the increase in supply from Iran and the continuation Saudi Arabia putting more oil on the market should understand the price drop over the next 12 months and a few analysts are predicting prices will belong to the $30’s.
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