Global oil markets enter "very crucial period"

• OPEC supplies actually hit a 9-month high of 32.6 million barrels per day last month, and the ramp-up "outweighed a substantial reduction in Iran and a further fall in Venezuela," IEA said in its monthly oil market report.
• In fact, global supplies hit a record 100 million barrels per day in August.

Yes, but: The Paris-based agency still sees the market "tightening up." And there are uncertainties about where additional barrels will come from if Venezuela and Iranian supplies keep falling as expected.

• OPEC countries have a combined 2.7 million barrels per day in spare capacity, but it's unclear how much is readily available.
• Brazilian production has not grown as much as expected.
• U.S. production is growing (more on that below), but infrastructure constraints could limit how much companies can boost output beyond existing plans.
• Libyan production has been up lately, but it's a fragile place.

The bottom line: Things could get rocky and oil prices, which for Brent have been in the $70–$80 range since April, could be "tested." IEA states:

"The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to 4 November will reveal more decisions taken by countries and companies with respect to Iranian oil purchases. It remains to be seen if other producers decide to increase their production."

State of the market: Traders seem to be responding to the currently robust supply picture. Per MarketWatch:

"Oil futures fell in early Thursday trade as a report showed production among OPEC members surged in August, pushing global inventories to a record."

Go deeper: Reuters breaks down the IEA report in detail here.