Oil Market Well Supplied Despite Conflicts – IEA

Huge rises in oil production from North America are keeping oil markets increasingly well supplied, the West’s energy watchdog said on Tuesday, suggesting oil prices are unlikely to rise much soon despite conflicts near key oil producing areas.

The International Energy Agency (IEA) said that although the situation in several key oil producing countries “remains more at risk than ever”, supplies were ample and the Atlantic Basin was even reported to be facing a glut.

Output from the Organization of the Petroleum Exporting Countries rose to a five-month high in July, as rises in production from Saudi Arabia and Libya more than offset declines in Iraq, Iran and Nigeria.

“Despite armed conflict in Libya, Iraq and Ukraine, the oil market today looks better supplied than expected, with an oil glut even reported in the Atlantic basin,” the International Energy Agency (IEA) said in its monthly report.

“U.S. and EU sanctions on the Russian oil sector are not providing oil markets with much support either. The consensus in the industry seems to be that neither set of sanctions will have any tangible nearterm impact on supplies. Even for the medium term, their impact appears questionable,” the IEA said.

The oil market has fallen over the last month but remains nervous about further supply shocks. Brent was trading just below $104 a barrel by 0750 GMT on Tuesday, down from a high above $115 in June.

“While the situation across these key producer countries remains more at risk than ever, so far the market appears confident that OPEC can deliver the production increase needed from it to meet rising demand expected in the second half of the year,” said the IEA, which advises major consuming nations on energy policy.