A sustained move under $53.61 will signal the use of sellers indicating a bull trap. This will likely 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 to the main retracement zone at $50.28 to $48.83.
A sustained move over $54.00 will indicate the use of buyers. This will also indicate that Friday’s move was fueled by fake buying rather and simply buy stops. The upside momentum will not likely continue and testing $54.98 is often a pipe dream for buyers from fuelled trade talks.
Lifting Iranian sanctions will have a significant impact on the world oil market. Iran’s oil reserves include the fourth largest on the planet and they’ve a production capacity of around 4 million barrels per day, which makes them the second largest producer in OPEC. Iran’s oil reserves take into account approximately 10% with the world’s total proven petroleum reserves, at the rate from the 2006 production the reserves in Iran could last 98 years. Most likely Iran create about 2million barrels of oil per day towards the market and based on the world bank this may result in the cut in the oil price by $10 per barrel next season.
Based on Data from OPEC, at the outset of 2013 the most important oil deposits will be in Venezuela being 20% of world oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. As a result of characteristics from the reserves it is not always easy to bring this oil towards the surface due to the limitation on extraction technologies as well as the cost to extract.
As China’s increased need for propane as an option to fossil fuel further reduces overall need for oil, the increase in supply from Iran and also the continuation Saudi Arabia putting more oil on top of the market should understand the price drop in the next Twelve months and some analysts are predicting prices will fall into the $30’s.
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