(Reuters) -Barclays on Thursday said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved outlook for demand.

"Geopolitical tensions have eased as the U.S​.-​mediated ceasefire between Israel and Iran continues to hold and the risk premium has evaporated, but price action has been reflecting better​-​than​-​expected fundamentals, in our view," said Barclays in a note.

Despite an accelerated increase in output from the Organization of the Petroleum Exporting Countries and its allies including Russia (OPEC+), global crude oil inventories declined in the second quarter, Barclays said.

The tighter balance outlook is driven by stronger demand growth, weaker non-OPEC supply growth, and the International Energy Agency's (IEA) upward revision of baseline demand estimates, it said.

Barclays raised its outlook for global demand growth by 260,000 barrels per day, with most of that coming from Organisation for Economic Co-operation and Development (OECD) countries, where it said "demand has been coming in stronger than expected".

It now sees U.S. oil demand growing by 130,000 bpd this year, which is 100,000 bpd ahead of its previous estimate following a weather-related demand boost earlier in the year, although it still expects a gradual slowdown in activity.

On the supply side, while OPEC+ will likely continue to phase out its voluntary production cuts at an accelerated pace, the actual output increase likely will continue to lag, Barclays said, pointing to pressure on some OPEC+ producers to curb output to compensate for earlier producing above their quotas.

"Between March and May 2025, OPEC+ target increased by 548 kb/d but the group's output remained largely flat, resulting in better compliance, in aggregate," it said.