A sustained move under $53.61 will signal the existence of sellers revealing 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 discover the selling to extend to the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate the existence of buyers. This will likely 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 would be the fourth largest on the planet and the’ve a production capacity of around 4 million barrels every day, driving them to the second largest producer in OPEC. Iran’s oil reserves take into account approximately 10% of the world’s total proven petroleum reserves, at the rate of the 2006 production the reserves in Iran could last 98 years. More than likely Iran will prove to add about 2million barrels of oil every day for the market and in accordance with the world bank this may result 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 have been in Venezuela being 20% of world 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 for the surface given the limitation on extraction technologies and the cost to extract.
As China’s increased interest in natural gas rather than fossil fuel further reduces overall requirement for oil, the rise in supply from Iran and also the continuation Saudi Arabia putting more oil onto the market should begin to see the price drop in the next Twelve months plus some analysts are predicting prices will fall into the $30’s.
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