A sustained move under $53.61 will signal the use of sellers revealing 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 supplying 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 can also indicate that Friday’s move was fueled by fake buying rather and just 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 affect the world oil market. Iran’s oil reserves would be the fourth largest on the globe and they have a production capacity around 4 million barrels per day, driving them to the second biggest producer in OPEC. Iran’s oil reserves take into account approximately 10% from the world’s total proven petroleum reserves, on the rate in the 2006 production the reserves in Iran could last 98 years. Probably Iran create about One million barrels of oil each day towards the market and in accordance with the world bank this will resulted in the decline in the oil price by $10 per barrel next season.
According to Data from OPEC, at the beginning of 2013 the largest oil deposits come in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics with the reserves it isn’t always easy to bring this oil to the surface given the limitation on extraction technologies along with the cost to extract.
As China’s increased need for natural gas rather than fossil fuel further reduces overall requirement for oil, the increase in supply from Iran as well as the continuation Saudi Arabia putting more oil onto the market should understand the price drop in the next 12 months and a few analysts are predicting prices will fall into the $30’s.
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