Investing.com- Global crude production capacity could be “stretched to the limit,” the International Energy Agency said in its latest forecast on Thursday.
The Paris-based organization said in its monthly report that there was “no sign of higher production from elsewhere that might ease fears of market tightness.”
Crude output from the the Organization of the Petroleum Exporting Countries and Russia, rose to a four-month high in June, up 180,000 barrels per day (bpd) to 31.87 million bpd, the IEA said.
The firm increased its 2018 estimate for OPEC crude demand by 100,000 bpd to 32 million bpd, while it cut its 2019 estimate by 100,000 bpd to 31.4 million bpd.
The IEA also lowered its forecast for non-OPEC oil supply by 70,000 bpd to 60.2 million bpd, but kept it unchanged for 2019 at 62 million bpd.
OPEC agreed in June to raise output at a nominal increase of 1 million barrels a day (bpd) amid pressure from the U.S. to decrease prices. While OPEC members are expected to add around 700,000 barrels a day, non-OPEC oil suppliers led by Russia would add the rest.
Increased sanctions from the U.S. against Iran, which is a member of OPEC, could reduce its oil exports by more than 1.2 million bpd, the IEA said. U.S. President Donald Trump has told countries to stop buying oil from Iran by November 4 or face consequences. Trump pulled out of an international nuclear deal with Tehran in May.
After the report, Crude Oil WTI Futures rose 0.75% to $70.90 a barrel as of 4:21 AM ET (8:21 GMT).
Brent crude futures, the benchmark for oil prices outside the U.S., was at $74.72 a barrel, an increase of 1.80%.