Global oil demand is expected to top 100 million barrels a day by the middle of next year, the International Energy Agency said Wednesday, but markets remain at risk to the impact of a trade war among the world's major economies as supplies remain tight amid OPEC's ongoing agreement on production cuts.

With the OPEC cartel members, as well as allies such as Russia, set to meet next week in Vienna, investors are starting to bet that Saudi Arabia, the world's biggest producer, will lead an effort to trim the output cut agreement, which is currently taking 1.8 million barrels from the market each day, in order to offset falling production in crisis-hit Venezuela and sanctions-impact Iran.

"To make up for the losses, we estimate that Middle East OPEC countries could increase production in fairly short order by about 1.1 mb/d and there could be more output from Russia on top of the increase already built into our 2019 non-OPEC supply numbers," the IEA said in its Monthly Oil Report. "However, even if the Iran/Venezuela supply gap is plugged, the market will be finely balanced next year, and vulnerable to prices rising higher in the event of further disruption. It is possible that the very small number of countries with spare capacity beyond what can be activated quickly will have to go the extra mile."

Oil prices extended the session's declines, however, after U.S. President Donald Trump Tweeted his dissatisfaction with the current state of the market following his return from the North Korea Summit in Singapore

Brent crude futures contracts for August delivery, the global benchmark for prices, were marked 7 cents lower from their Tuesday close in New York and changing hands at $75.81 per barrel in early trading, extending a decline of around 6.2% since hitting a near four-year high of $80.50 last month. WTI contracts for July, which are more tightly linked to US gas prices, were seen 34 cents lower at $66.02 per barrel.

The IEA said global demand should rise by 1.4 million barrels a day next year, and top 100 million barrels a day for the first time ever, as measures in some emerging market economies, such as Argentina, Brazil, India and Indonesia, to allow customers to cope with higher prices kick-in.

"When you add the boost to demand from the growing petrochemicals sector, where some projects are coming on stream earlier than previously thought, the result is global oil demand growth for 2019 of 1.4 mb/d, similar to this year's level," the IEA said. "Of course, there are downside risks: these include the possibility of higher prices, a weakening of economic confidence, trade protectionism and a potential further strengthening of the US dollar."

On the supply side, much will depend on the outcome of next week's two-day meeting in Vienna, with a Kremlin spokesperson saying Russian President Vladimir Putin will meet with Saudi Crown Prince Mohammed bi Salam in Moscow as the soccer World Cup kicks off Thursday to discuss, among other issues, global oil production. 

"Statements by several parties suggest that action in terms of higher supply could be on the way," the IEA said."In the meantime, the IEA is monitoring the market situation closely, and, as ever, stands ready to advise its member governments on any action that might be necessary. It is also in regular dialogue with emerging importing countries."