In its latest monthly oil report, the IEA warned that the oil market is entering a "very crucial period", highlighting continued output decline in Venezuela, this week's attack on the headquarters of Libya's NOC and a sharp reduction in Iranian output ahead of the reinstatement of U.S. sanctions on November 4.
Leading traders such as Vitol CEO Ian Taylor and Royal Dutch Shell's former head of crude trading Mike Mueller have been among those to express concern about the long-term decline in North Sea production and its impact on the liquidity of the market that sets the price of dated Brent.
Price rises were capped after U.S. Energy Secretary Rick Perry said Saudi Arabia, other members of OPEC and Russian Federation were to be admired for trying to prevent a spike in global oil prices. From August 6, Washington re-introduced some of the financial sanctions while the sanctions affecting the petroleum sector of Iran will kick off from November 4. The government is also witnessing a backlash from the opposition parties over the high prices of the crude oil.
The IEA forecasts non-OPEC production to grow by 2 million bpd in 2018 and 1.8 million bpd in 2019, characterized by "relentless growth led by record output from the U.S".
"While oil prices are higher this week, volatility will stay despite the obvious supply drop among some OPEC members such as Iran, as the trade conflict between the world's two biggest economies is still in play", Kim Kwangrae, a commodities analyst at Samsung Futures Inc., said by phone from Seoul. OPEC is now supplying 32.7 million barrels a day, according to a Bloomberg survey, and that is with Iraq, Nigeria and Libya all producing near multi-year highs while their security situations deteriorate.
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November Brent was up 15 cents, or 0.2 per cent, to $78.33 a barrel.
Here are the production numbers of the OPEC countries in the past two months.
He named Iraq, Libya, Nigeria and Saudi Arabia as some of the producers that will be able to achieve more output increases in the coming months.
In theory Saudi Arabia could immediately raise output to 11.5 million barrels a day-that's what Crown Prince Mohammed bin Salman told Bloomberg in April 2016.
The number of ships loaded with Iranian oil and anchored off the loading port of Kharg Island and the Souroush oil field has also risen as Iran's pool of buyers shrank, the data showed.