A sustained move under $53.61 will signal the existence of sellers which indicates 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 arehorrified to find that the supplying extend in to the main retracement zone at $50.28 to $48.83.
A sustained make room $54.00 will indicate a good buyers. This can also indicate that Friday’s move was fueled by fake buying rather and simply 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 have a significant impact on the world oil market. Iran’s oil reserves include the fourth largest in the world with a production capacity of around 4 million barrels each day, causing them to be the second largest producer in OPEC. Iran’s oil reserves take into account approximately 10% of the world’s total proven petroleum reserves, at the rate from the 2006 production the reserves in Iran could last 98 years. Probably Iran create about 1 million barrels of oil a day to the market and based on the world bank this will likely result in the cut in the oil price by $10 per barrel pick up.
Based on Data from OPEC, at the outset of 2013 the largest oil deposits will be in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. As a result of characteristics with the reserves it is not always easy to bring this oil towards the surface because of the limitation on extraction technologies and the cost to extract.
As China’s increased need 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 see the price drop in the next 12 months plus some analysts are predicting prices will get into the $30’s.
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