A sustained move under $53.61 will signal the presence of sellers which indicates a bull trap. This will likely 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 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 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 is a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant influence on the world oil market. Iran’s oil reserves will be the fourth largest in the world and the’ve a production capacity of about 4 million barrels per day, making them the second biggest producer in OPEC. Iran’s oil reserves be the cause of approximately 10% in the world’s total proven petroleum reserves, in the rate in the 2006 production the reserves in Iran could last 98 years. Most likely Iran will add about One million barrels of oil per day on the market and according to the world bank this may result in the cut in the crude oil price by $10 per barrel pick up.
Based on Data from OPEC, at the start of 2013 the greatest oil deposits are in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Because of the characteristics in the reserves it isn’t always simple to bring this oil for the surface in the limitation on extraction technologies and also the cost to extract.
As China’s increased need for propane instead of fossil fuel further reduces overall interest in oil, the increase in supply from Iran along with the continuation Saudi Arabia putting more oil on top of the market should begin to see the price drop on the next 1 year and a few analysts are predicting prices will fall under the $30’s.
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