Opec will need to pump more oil this year than previously expected to meet rising world demand and cover a shortfall from other producers such as Russia, the International Energy Agency said on Wednesday.
The agency, an adviser to 26 industrialised countries, also said it expected no early end to concerns over Iranian supply, raised by Tehran's nuclear row with the West, and lost output in Nigeria that have helped push oil near a record high this week.
US crude has risen to nearly $70 a barrel as violence in Nigeria cuts output by almost a quarter, increasing a strain on supply. The IEA's report points to a narrower balance between supply and demand, analysts said.
"The data flow is indicating a tighter market - supply being reduced and demand being revised up," said Kevin Norrish, an analyst at Barclays Capital in London.
Higher-than-expected use in the Middle East and Asia Pacific prompted the Paris-based IEA to raise its estimate for world demand this year by 300,000 barrels per day to 85.1 million bpd. While raising demand figures, the IEA trimmed its estimate for growth in oil use in 2006 by 20,000 bpd to 1.47 million bpd and said demand would be higher with lower oil costs.
The IEA now expects production from outside Opec to rise by 1.15 million bpd this year, less than previously thought, and it nudged down an estimate for growth in Russia, the world's second-largest exporter, to 2.8 percent.
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