Oil traders have closely watched USA crude production to see whether output gains from US shale formations will surpass the 1.8 million bpd cuts.
The agency also sharply raised its outlook for United States oil production for the coming year it now sees production averaging 10.3 million b/d, or almost 1 mb/d more than in 2017.
The Paris-based IEA, for its part, said in its latest Oil Market Report from December that "On considering the final component in the balance - non-OPEC production - we see that 2018 might not be quite so happy for OPEC producers".
This year also started with the OPEC vs. shale tug-of-war, although in the first two weeks of 2018, geopolitical risks and declining inventories trumped concerns over the rise in USA shale, and supported oil prices and sent Brent briefly breaking above $70 a barrel on Thursday.
Much of the production growth will be concentrated in the Permian Basin, the largest US oilfield stretching across Texas and New Mexico, said John Staub, the EIA director of the office of petroleum, natural gas and biofuels analysis.
The West Texas Intermediate for February delivery increased 0.50 USA dollar to settle at 64.30 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery added 0.61 dollar to close at 69.87 dollars a barrel on the London ICE Futures Exchange.
Relatively weak Chinese December oil data weighed on prices, traders and analysts said.
US West Texas Intermediate (WTI) prices reached a December 2014 high of $63.67 a barrel earlier on.
The market was supported by OPEC-led production cuts and expectations that USA crude inventories have dropped for an eighth week. Demand is expected to climb an additional 340,000 bpd in 2019 to 20.65 million bpd, the agency said.
"This year's rapid rise in oil prices, which hit $70 this week, is backed by strong demand growth and a fall in oversupply on the back of the OPEC and non-OPEC pact, not only by political tensions, Mazroui said". Average WTI crude oil prices are forecast to stay between $4/b and $5/b lower than Brent prices in both 2018 and 2019, falling from the $6/b average price difference seen in the fourth quarter of 2017. This is the first STEO to forecast through 2019 and it contains updates for 2018 forecasts.
That's bad news for the USA coal industry and Donald Trump ambitions to restore coal's fortunes.
On prices, the agency said Brent, the benchmark for North Sea crude oil spot prices, is forecast to average $60 per barrel this year and $61 per barrel in 2019, after experiencing a sharp run up last year. The EIA expects global inventories to increase by 300,000 b/d in 2019.