A sustained move under $53.61 will signal a good sellers indicating a bull trap. This will likely trigger a labored break with potential targets weighing $52.40, $51.29 and $50.66. If $50.66 fails as support then look for the selling to extend in to the main retracement zone at $50.28 to $48.83.

A sustained move over $54.00 will indicate the existence of buyers. This will likely also indicate that Friday’s move was fueled by fake buying rather and simply buy stops. The upside momentum won’t continue and testing $54.98 is really a fantasy for buyers from fuelled trade talks.

Lifting Iranian sanctions may significant impact on the world oil market. Iran’s oil reserves are the fourth largest in the world with a production capacity of about 4 million barrels per day, which makes them the second largest producer in OPEC. Iran’s oil reserves account for approximately 10% in the world’s total proven petroleum reserves, with the rate with the 2006 production the reserves in Iran could last 98 years. Most likely Iran create about A million barrels of oil per day to the market and in accordance with the world bank this can resulted in the cut in the oil price by $10 per barrel pick up.

In accordance with Data from OPEC, at the beginning of 2013 the most important oil deposits will be in Venezuela being 20% of global oil reserves, Saudi Arabia 18%, Canada 13% and Iran 9%. As a result of characteristics of the reserves it isn’t always easy to bring this oil for the surface given the limitation on extraction technologies as well as the cost to extract.

As China’s increased interest in gas main as an option to fossil fuel further reduces overall requirement for oil, the increase in supply from Iran and the continuation Saudi Arabia putting more oil to the market should understand the price drop on the next 1 year plus some analysts are predicting prices will get into the $30’s.

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