The world’s spare oil production capacity is growing increasingly stretched and alarm bells are ringing within the IEA. The organization warns in its July Oil Market Report (OMR) that as the Gulf States and Russia ramp up production it “comes at the expense of the world’s spare capacity cushion, which might be stretched to the limit…We see no sign of higher production from elsewhere that might ease fears of market tightness.”
Growing supply concerns focus on Iran and Venezuela as well as the chronic instability that Libya is unable to shake off. Covering these alone will prove a stretch for global spare capacity which MEES pegs at around 3mn b/d last month. But additional unexpected outages elsewhere could overwhelm this. (CONTINUED - 891 WORDS)
