A sustained move under $53.61 will signal the use of sellers which indicates a bull trap. This may 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 also indicate that Friday’s move was fueled by fake buying rather and merely buy stops. The upside momentum will not likely continue and testing $54.98 is a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions have a significant impact on the world oil market. Iran’s oil reserves would be the fourth largest on the globe and they’ve a production capacity of approximately 4 million barrels per day, driving them to the second biggest producer in OPEC. Iran’s oil reserves take into account approximately 10% of the world’s total proven petroleum reserves, on the rate of the 2006 production the reserves in Iran could last 98 years. More than likely Iran will add about One million barrels of oil every day to the market and based on the world bank this can resulted in lowering of the oil price by $10 per barrel pick up.
In accordance with Data from OPEC, at the beginning of 2013 the biggest oil deposits will be in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Because of the characteristics with the reserves it is not always possible to bring this oil for the surface given the limitation on extraction technologies and the cost to extract.
As China’s increased interest in natural gas as an alternative to fossil fuel further reduces overall requirement for oil, the increase in supply from Iran and also the continuation Saudi Arabia putting more oil on the market should begin to see the price drop within the next 1 year and several analysts are predicting prices will fall into the $30’s.
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