An oil market rally may ease off as prices that hit a three-year high last month help push up global production, particularly in the United States, the International Energy Agency (IEA) said on Tuesday.
“The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon… due to rising oil supplies,” the Paris-based agency said in its monthly oil report.
“Current prices provide a strong incentive to boost (U.S.) activity even as operators stick to capital discipline pledges,” it said.
A hurricane battered the main U.S. production and export hub in the Gulf coast in August but U.S. output made up for half the increase in global oil production last month and is due to account for 60% of non-OPEC+ supply gains in 2022.
However, the IEA said U.S. production would not return to pre-pandemic levels until the end of next year.