International Energy Agency reduced estimates for oil demand next year due to growing threat to global economy, however, it warns that prices will stay high due to supply constraints, Bloomberg reports.

Among reasons for the cut are lower outlook for world economy growth from International Monetary Fund and trade disputes. However, output losses in Venezuela and Iran will result in spare capacities equal to just 2% of global demand, and it will be reduced further.

Concern over supply restrictions due to US sanctions against Iran led to price growth above $85 per barrel last week.

Demand growth forecast for 2018 and 2019 from IEA was reduced by about 110000 barrels per day to 1,3 million and 1,4 million per day respectively.

Recent report shows that OPEC and its partners already increased oil shipments by 1,6 million barrels per day since May.

The ability of organization to further increase supply will be tested in nearest months after sanctions will take effect.

Meanwhile, global oil supplies grew to record level 100,3 barrels per day in third quarter, which is 2,3 barrels per day higher than during the same period last year.