The International Energy Agency on Wednesday said weaker economic growth and the effects of high oil prices were easing tight world crude market conditions in a report suggesting more energy price relief could be in the offing.
"Market fundamentals look likely to ease in coming months, in part a response to the high prices seen over the past 12-18 months," the Paris-based energy watchdog said in its September oil market report.
The report comes hours after the Organization of Petroleum Exporting Countries decided to ax production by 520,000 barrels a day in a surprise move aimed at stabilizing crude prices around $100 a barrel after sliding 29% from a record $147 a barrel in July.
Weaker economic activity and high oil prices that are forcing consumers to reduce consumption helped oil inventories in big nations like the U.S. rise above their five-year average range in July, the IEA said.
The agency cautioned though that global spare oil production capacity remains tight and vulnerable to outages in places like Nigeria that have routinely boosted crude prices in recent years.
Underscoring that theme, the IEA revised down again its expectations for supply growth this year from non-OPEC producers like Mexico by 180,000 barrels a day.