LONDON (Reuters) – The world’s oil supply cushion could be stretched to the limit due to prolonged outages, supporting prices and threatening demand growth, the International Energy Agency said on Thursday. The expected drop in Iranian crude exports this year due to renewed U.S. sanctions, coupled with a decline in Venezuela’s production and outages in Libya, Canada and the North Sea have driven oil prices to their highest since 2014 in recent weeks. OPEC and other key producers including Russia responded to the tightness by easing a supply-cut agreement, with Saudi Arabia vowing to support the market as U.S. President Donald Trump accused the group of pushing prices higher. The Paris-based IEA said in its monthly Oil Markets Report that there were already “very welcome” signs that output from leading producers had been boosted and may reach a record. The global energy watchdog however said the disruptions underscored the pressure on global supplies as the world’s spare production capacity cushion “might be stretched to the limit”. Spare capacity refers to a producer’s ability to ramp up production in a relatively short time. Much of it is located in the Middle East. The IEA said OPEC crude production in June reached… continue reading
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