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 then look for the supplying extend into the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate the presence of buyers. This can 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 can be a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions will have a significant impact on the entire world oil market. Iran’s oil reserves include the fourth largest on earth and they have a production capacity of about 4 million barrels per day, which makes them 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 in the 2006 production the reserves in Iran could last 98 years. Almost certainly Iran will add about A million barrels of oil each day for the market and based on the world bank this may resulted in lowering of the oil price by $10 per barrel pick up.
According to Data from OPEC, at the beginning of 2013 the greatest oil deposits will be in Venezuela being 20% of worldwide oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Because of the characteristics of the reserves it is not always simple to bring this oil on the surface in the limitation on extraction technologies and also the cost to extract.
As China’s increased requirement for propane as an option to fossil fuel further reduces overall need for oil, the increase in supply from Iran and the continuation Saudi Arabia putting more oil to the market should begin to see the price drop within the next Twelve months and some analysts are predicting prices will get into the $30’s.
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