A sustained move under $53.61 will signal a good sellers which indicates a bull trap. This can trigger a labored break with potential targets weighing $52.40, $51.29 and $50.66. If $50.66 fails as support discover the selling to extend in the main retracement zone at $50.28 to $48.83.
A sustained make room $54.00 will indicate the use of buyers. This will likely also indicate that Friday’s move was fueled by fake buying rather and just buy stops. The upside momentum will not continue and testing $54.98 is a fantasy 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 earth and they’ve a production capacity of approximately 4 million barrels per day, causing them to be the second largest producer in OPEC. Iran’s oil reserves account for approximately 10% of the world’s total proven petroleum reserves, with the rate in the 2006 production the reserves in Iran could last 98 years. More than likely Iran create about 2million barrels of oil every day towards the market and according to the world bank this will lead to the cut in the crude oil price by $10 per barrel next year.
In accordance with Data from OPEC, at the beginning of 2013 the biggest oil deposits come in Venezuela being 20% of worldwide oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics in the reserves it is not always possible to bring this oil on the surface due to the limitation on extraction technologies and also the cost to extract.
As China’s increased requirement for gas as an alternative to 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 start to see the price drop on the next 12 months and several analysts are predicting prices will belong to the $30’s.
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