A sustained move under $53.61 will signal the presence of sellers indicating a bull trap. This can trigger a labored break with potential targets coming in at $52.40, $51.29 and $50.66. If $50.66 fails as support then look for the selling to extend in to the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate the use 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 fantasy for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant impact on the world oil market. Iran’s oil reserves are the fourth largest on the planet and the’ve a production capacity around 4 million barrels each day, causing them to be the second biggest producer in OPEC. Iran’s oil reserves are the cause of approximately 10% in the world’s total proven petroleum reserves, at the rate of the 2006 production the reserves in Iran could last 98 years. Most likely Iran include about One million barrels of oil every day on the market and in accordance with the world bank this may lead to the lowering of the crude oil price by $10 per barrel the coming year.
According to Data from OPEC, at the outset of 2013 the most important oil deposits come in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics of the reserves it’s not always possible 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 gas as an alternative to fossil fuel further reduces overall demand for oil, the increase in supply from Iran and also the continuation Saudi Arabia putting more oil onto the market should begin to see the price drop within the next Twelve months and some analysts are predicting prices will get into the $30’s.
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