A sustained move under $53.61 will signal the use of sellers indicating 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 supplying extend in the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate the existence of buyers. This may also indicate that Friday’s move was fueled by fake buying rather and buy stops. The upside momentum is not going to continue and testing $54.98 can be a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions will have a significant effect on the world oil market. Iran’s oil reserves include the fourth largest in the world and they have a production capacity around 4 million barrels each day, which makes them the second biggest producer in OPEC. Iran’s oil reserves take into account approximately 10% with the world’s total proven petroleum reserves, at the rate in the 2006 production the reserves in Iran could last 98 years. Almost certainly Iran will add about A million barrels of oil a day for the market and based on the world bank this can result in the cut in the crude oil price by $10 per barrel next year.
Based on Data from OPEC, at the start of 2013 the biggest oil deposits are in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics in the reserves it’s not always simple to bring this oil to the surface because of the limitation on extraction technologies and also the cost to extract.
As China’s increased requirement for propane instead of fossil fuel further reduces overall requirement for oil, the rise in supply from Iran and also the continuation Saudi Arabia putting more oil to the market should start to see the price drop in the next Twelve months plus some analysts are predicting prices will belong to the $30’s.
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