Present Crude Oil Swing Chart Technical Forecast

A sustained move under $53.61 will signal the use 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 then look for the supplying 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 can also indicate that Friday’s move was fueled by fake buying rather and buy stops. The upside momentum won’t continue and testing $54.98 is a pipe dream for buyers from fuelled trade talks.

Lifting Iranian sanctions have a significant affect the entire world oil market. Iran’s oil reserves include the fourth largest in the world and they have a production capacity of around 4 million barrels every day, driving them to the second largest producer in OPEC. Iran’s oil reserves are the cause of approximately 10% from the world’s total proven petroleum reserves, in the rate of the 2006 production the reserves in Iran could last 98 years. Almost certainly Iran will add about 1 million barrels of oil each day on the market and according to the world bank this will result in the decline in the crude oil price by $10 per barrel next year.

According to Data from OPEC, at the start of 2013 the largest oil deposits are in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to the characteristics from the reserves it is not always possible to bring this oil for the surface due to the limitation on extraction technologies along with the cost to extract.

As China’s increased interest in gas main instead of fossil fuel further reduces overall requirement for oil, the increase in supply from Iran and the continuation Saudi Arabia putting more oil on top of the market should start to see the price drop on the next Twelve months plus some analysts are predicting prices will get into the $30’s.

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About the Author: Josh Shepard

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