A sustained move under $53.61 will signal the existence of sellers indicating a bull trap. This will 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 selling to extend in to 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 simply buy stops. The upside momentum will not likely continue and testing $54.98 can be a fantasy for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant effect on the entire world oil market. Iran’s oil reserves would be the fourth largest on the planet with a production capacity of approximately 4 million barrels each day, driving them to the second largest producer in OPEC. Iran’s oil reserves are the cause of approximately 10% with the world’s total proven petroleum reserves, at the rate of the 2006 production the reserves in Iran could last 98 years. Probably Iran create about 2million barrels of oil each day towards the market and according to the world bank this can lead to the cut in the oil price by $10 per barrel next year.
As outlined by Data from OPEC, at the beginning of 2013 the most important oil deposits have been in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics of the reserves it’s not always easy to bring this oil on the surface because of the limitation on extraction technologies and the cost to extract.
As China’s increased need for gas as an option to fossil fuel further reduces overall requirement for oil, the rise in supply from Iran along with the continuation Saudi Arabia putting more oil onto the market should begin to see the price drop in the next 12 months and several analysts are predicting prices will belong to the $30’s.
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