Falling spare oil capacity underscores need for more investment, IEA says

Falling spare oil capacity underscores need for more investment, IEA says

LONDON- The world's spare oil production capacity which helps smooth the market will fall by the end of 2022 as OPEC+ producers lift output, highlighting the need for more investment to meet rising crude demand, the International Energy Agency said on Thursday. The IEA said in its monthly oil market report that OPEC+ spare capacity could fall to below 4 million barrels per day (bpd) in the fourth quarter of 2022 from 9 million bpd in the first quarter of 2021. It forecast global demand at 99.6 million bpd in 2022, slightly above pre-pandemic levels. Spare capacity is an important cushion for the oil market as it allows producers to quickly respond to unplanned outages that could tighten the market and cause big fluctuations in prices. Spare capacity will be concentrated in Middle East producers Saudi Arabia, the United Arab Emirates, Iraq and Kuwait, the IEA said, while Russia would be pumping flat out in the fourth quarter of 2022, based on capacity of 10.45 million bpd. "Shrinking global spare capacity underscores the need for increased investments to meet demand further down the road," it said, after the demand cratered during the pandemic, prompting many producers to push back or