A sustained move under $53.61 will signal the presence of sellers which indicates a bull trap. This will trigger a labored break with potential targets coming in at $52.40, $51.29 and $50.66. If $50.66 fails as support arehorrified to find that the selling to 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 buy stops. The upside momentum won’t continue and testing $54.98 is really a fantasy for buyers from fuelled trade talks.
Lifting Iranian sanctions will have a significant influence on the entire 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, which makes them the second largest producer in OPEC. Iran’s oil reserves account for approximately 10% with the world’s total proven petroleum reserves, at the rate with the 2006 production the reserves in Iran could last 98 years. Probably Iran will prove to add about 1 million barrels of oil every day towards the market and in accordance with the world bank this will resulted in lowering of the crude oil price by $10 per barrel next season.
In accordance with Data from OPEC, at the outset of 2013 the largest oil deposits are in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics of the reserves it is not always easy to bring this oil towards the surface due to 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 requirement for oil, the increase in supply from Iran and the continuation Saudi Arabia putting more oil onto the market should start to see the price drop within the next 1 year and some analysts are predicting prices will fall into the $30’s.
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