Oil Market May Face Inventory Crunch

Higher, more volatile oil prices will loom this winter if OPEC refuses to boost crude production as major importing countries head into the peak heating oil season, an industry report warned.

A decrease last month in crude exports from Iraq has squeezed supplies and contributed to a dwindling of U.S. inventories. Global demand, meanwhile, is forecast to rise by a robust 1.6 million barrels a day in the fourth quarter, the International Energy Agency said in its monthly oil market report.

Markets face a challenge similar to that in 1999, when a plunge in oil inventories paved the way for a spike in prices and extreme instability, it said.