U.S. crude oil prices fell on Friday, as the International Energy Agency warned that the recent cooling in the market may not last.
“The recent cooling down of the market, with short-term supply tensions easing, currently lower prices, and lower demand growth might not last,” the Paris-based agency said in its monthly report.
The IEA kept its 2018 oil demand growth forecast unchanged at 1.4 million bpd but raised its 2019 forecast by around 110,000 bpd to 1.49 million bpd.
West Texas Crude oil futures fell 0.21% to $66.67 a barrel as of 5:08 AM ET (9:08 GMT). Meanwhile Brent crude futures, the benchmark for oil prices outside the U.S., decreased 0.25% to $71.89.
IEA warned that upcoming oil sanctions against Iran could bring turmoil to the market later in the year. U.S. sanctions targeting Iranian oil is expected in early November and could increase the potential of a global energy supply shortage.
Many countries, including Europe, China and Russia, oppose the sanction, but the White House wants other countries to stop buying oil from Iran.
“As oil sanctions against Iran take effect, perhaps in combination with production problems elsewhere, maintaining global supply might be very challenging and would come at the expense of maintaining an adequate spare capacity cushion,” the IEA said.
Oil prices have been driven higher in the past few months as demand for oil outstrips supply but cooled in recent weeks amid trade tensions and supply disruptions.
Traders are also looking ahead to the U.S. Baker Hughes oil rig count, a leading indicator of demand for oil products, which comes out at 1:00 PM ET (15:00 GMT).
In other energy trading, Gasoline RBOB Futures rose 0.36% at $2.0088 a gallon, while heating oil rose 0.03% to $2.1125 a gallon. Natural gas futures were down 0.30% to $2.946 per million British thermal units.