A sustained move under $53.61 will signal the presence of sellers indicating 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 into 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 merely buy stops. The upside momentum will not likely continue and testing $54.98 is really a fantasy for buyers from fuelled trade talks.
Lifting Iranian sanctions will have a significant impact on the entire world oil market. Iran’s oil reserves would be the fourth largest on earth and they’ve a production capacity around 4 million barrels each day, which makes them the second largest producer in OPEC. Iran’s oil reserves take into account approximately 10% from the world’s total proven petroleum reserves, with the rate of the 2006 production the reserves in Iran could last 98 years. Probably Iran create about 2million barrels of oil every day for the market and according to the world bank this will resulted in cut in the oil price by $10 per barrel the coming year.
As outlined by Data from OPEC, at the start of 2013 the greatest oil deposits will be in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics of the reserves it’s not always simple to bring this oil on the surface given the limitation on extraction technologies and also the cost to extract.
As China’s increased need for gas main as an option to fossil fuel further reduces overall interest in oil, the increase in supply from Iran along with the continuation Saudi Arabia putting more oil to the market should understand the price drop within the next 1 year and some analysts are predicting prices will get into the $30’s.
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