Tension between Iran and the West is likely to keep oil prices high despite a significant improvement in world supply and a big buildup of oil stocks, the International Energy Agency said on Friday.
The agency said global oil supply rose to 91 million barrels a day in April, an increase of 600,000 barrels a day from March. But it said in its monthly oil market report that uncertainty remained because of “geopolitical risks.”
In March, North Sea Brent crude futures rose above $128 per barrel as investors worried that a conflict between Iran and the West could cut off oil supplies from the Middle East.
But prices have fallen sharply over the past two months on the disappointing economic performances of European nations and the United States, and as geopolitical tensions have eased.
“The oil market is still jittery, but it is much less uneasy now that supplies and stocks have improved,” said David Fyfe of the energy agency. “A lot will depend on how much Iranian crude is lost to the market.”