A sustained move under $53.61 will signal the existence of sellers indicating 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 supplying extend into the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate a good buyers. This may also indicate that Friday’s move was fueled by fake buying rather and buy stops. The upside momentum will not continue and testing $54.98 is a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions may significant impact on the planet oil market. Iran’s oil reserves would be the fourth largest in the world with a production capacity of approximately 4 million barrels a day, making them the second biggest producer in OPEC. Iran’s oil reserves be the cause of approximately 10% from 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 add about A million barrels of oil a day to the market and in line with the world bank this can resulted in lowering of the oil price by $10 per barrel the coming year.
According to Data from OPEC, at the beginning of 2013 the largest oil deposits are in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. As a result of characteristics in the reserves it is not always easy to bring this oil for the surface due to the limitation on extraction technologies and the cost to extract.
As China’s increased interest in gas main instead of fossil fuel further reduces overall interest in oil, the increase in supply from Iran and also the continuation Saudi Arabia putting more oil on top of the market should begin to see the price drop on the next 1 year and some analysts are predicting prices will get into the $30’s.
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