World Oil Supply Tightens In Last 2 Months – EIA

Global oil supplies tightened over the last two months even as top exporter Saudi Arabia produced high levels of crude, a US government report said on Friday, leaving the Obama administration leeway to maintain sanctions on Iran.

Global oil inventories in countries other than Iran fell about 1.2 million barrels per day in July and August, due mostly to a seasonal peak in demand, said the report by the Energy Information Administration.

The report, required by the Iran sanctions law President Barack Obama signed last year, is published every two months by the Energy Information Administration. A copy of the report was obtained by Reuters ahead of its publication.

The draw was smaller than a 1.6 million-bpd dip seen last year in the same time period. But, as markets tighten, it gives the Obama administration room to enforce sanctions on Iran oil transactions.

World spare oil production capacity was 2.4 million bpd, steady with the previous report, the EIA said.

Countries in the West believe Iran is trying to make nuclear weapons. Iran says its nuclear program is for civilian purposes.