Even with Saudi Arabia offering market assurances, concerns about dwindling spare capacity could push oil prices above $80 per barrel, Swiss bank UBS said.

Members of the Organization of Petroleum Exporting Countries in June agreed to relax compliance with a multilateral production deal to address supply concerns from member states Iran, Libya and Venezuela.

Security issues in Libya and chronic woes in Venezuela pushed compliance beyond 100 percent. The U.S. government, meanwhile, is pressuring Iranian oil customers to cut exports to zero by November.

For the United States, higher oil prices means higher consumer fuel prices in the world's leading economy. Saudi Arabia's King Salman said following a weekend phone call with U.S. President Donald Trump that both sides agreed that extraordinary efforts were needed to maintain oil market stability.

"The cabinet also affirmed the kingdom's readiness to use its spare capacity when needed to deal with any future changes in oil supply and demand rates in coordination with other producing countries," the official Saudi Press Agency stated Tuesday.

Spare capacity refers to the amount of extra oil barrels a producer can bring to the market in relatively short order. Saudi Arabia is one of the few countries with any real spare capacity on hand. The largest producer in OPEC, the country has never produced more than 10.7 million barrels of oil per day and tapping into the extra million barrels per day could be risky.

"A too-quick ramp-up of production over a sustained period could risk damaging reservoir pressure and strain oil fields," Giovanni Stauvano, a commodity analyst for UBS, wrote in a research brief emailed Thursday to UPI.

That suggests there's only so much producers can actually do to address any supply side shocks beyond what's already apparent from Libya and Venezuela. It's hurricane season in the Atlantic, where storms could impact production in the U.S. waters of the Gulf of Mexico. By November, UBS estimates Iranian exports will drop from around 2 million bpd to as low as 500,000 bpd.

For spare capacity, UBS estimates levels could fall to a 10-year low within the next year.

"Considering that oil demand has risen by nearly 13 million bpd, or 15 percent, since 2008, spare capacity as a percentage of oil demand would stay at extremely low levels," Stauvano wrote.

Outside of OPEC, Russia has been eager to churn out more oil, though it could be bound to its partnership in the group's pledge to stabilize the market. For the United States, the Swiss investment bank said it wasn't optimistic about shale oil filling the market gap. Trump's trade policies on steel and aluminum could stifle growth in the U.S. oil sector.

Stauvano said his base case was that the oil market is vulnerable because of the dwindling spare capacity. As a result, UBS raised its forecast for the price of Brent crude oil from around $80 per barrel for the six month range to $85 per barrel.

Brent, the global benchmark for the price of oil, was trading near $78 per barrel on Thursday. The UBS estimate is sharply higher than a forecast from the U.S. Energy Information Administration, which in June put Brent at around $71 per barrel on average for the year.

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