A sustained move under $53.61 will signal a good sellers which indicates a bull trap. This may trigger a labored break with potential targets weighing $52.40, $51.29 and $50.66. If $50.66 fails as support discover the supplying extend in the main retracement zone at $50.28 to $48.83.

A sustained move over $54.00 will indicate a good buyers. This will likely also indicate that Friday’s move was fueled by fake buying rather and buy stops. The upside momentum will not likely continue and testing $54.98 is a pipe dream for buyers from fuelled trade talks.

Lifting Iranian sanctions will have a significant impact on the globe oil market. Iran’s oil reserves will be the fourth largest in the world and they’ve a production capacity of about 4 million barrels a day, which makes them the second biggest producer in OPEC. Iran’s oil reserves account for approximately 10% with the world’s total proven petroleum reserves, at the rate in the 2006 production the reserves in Iran could last 98 years. More than likely Iran will add about A million barrels of oil every day to the market and based on the world bank this will likely resulted in decline in the crude oil price by $10 per barrel pick up.

According to Data from OPEC, at the beginning of 2013 the largest oil deposits will be in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. Due to characteristics with the reserves it is not always very easy to bring this oil to the surface in the limitation on extraction technologies and also the cost to extract.

As China’s increased interest in natural gas as an option to fossil fuel further reduces overall demand for oil, the rise in supply from Iran along with the continuation Saudi Arabia putting more oil onto the market should begin to see the price drop within the next 12 months and a few analysts are predicting prices will fall under the $30’s.

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