Oil bulls target the $60 handle, although fresh supply fears capping the advance

The price of a barrel of oil has been meeting firm resistance and has dropped over 1% on Tuesday, falling from a high of $58.73 to a low of $57.30 as markets price out  U.S. National Security Adviser John Bolton.

The oil markets fear further supply following bets that the departure of U.S. National Security Adviser John Bolton will ease tensions with Iran, potentially leading to the lifting of sanctions, which could put more oil on the market.

However, on the flip side, we have UAE oil minister Mazrouei saying that OPEC Joint Ministerial Monitoring Committee (JMMC) is unconcerned with discussing deeper oil cuts and that there are hopes that compliance levels will rise.

Meanwhile, senior US energy officials are saying that  Washington will continue to assert ‘maximum-pressure campaign’ on Iran and that the administration will monitor oil shipments and will consider designating identified parties buying Iranian oil. 

Upside bias analysis

"As demand worries ease, the more positive fundamental narrative is able to shine - In addition, the appointment of a new energy minister in Saudi, who is reported to be looking for as much as a $25/bbl jump in prices to help maximize the value of the Aramco IPO and to increase revenue required to fund social spending, is also helping to give prices a lift,"

analysts at TD Securities argued. 

WTI levels

WTI is holding up in neutral territories but is embarking on a run towards the 78.6% Fibonacci retracement levels of the July swing lows and highs with the 60 handle on the radar - 60.65 comes as the key target. To the downside, the 23.6% level at 53 the figure is critical.