IEA: Reduced idle oil production capacity highlights more investment demand

October 14 news, the International Energy Agency (IEA) said on Thursday that as OPEC increases production, global idle oil production capacity will be reduced by the end of 2022, highlighting the greater investment demand to meet the growth of crude oil demand
.


The IEA said in its monthly oil market report that in the fourth quarter of 2022, OPEC's idle capacity is expected to fall below 4 million barrels per day from 9 million barrels per day in the first quarter of this year
.
The report predicts that global oil demand in 2022 will be 99.
6 million barrels per day, slightly higher than the pre-epidemic level
.


Idle capacity is an important buffer tool for the oil market, enabling oil-producing countries to quickly respond to unexpected supply interruptions and prevent market supply from tightening, which will lead to sharp fluctuations in oil prices
.


IEA said that idle production capacity will be concentrated in Middle East oil-producing countries Saudi Arabia, the United Arab Emirates, Iraq and Kuwait
.
Based on the 10.
45 million barrels per day production capacity, Russia will make every effort to produce in the fourth quarter of 2022
.


According to the report, “the reduction of global idle production capacity highlights the need for more investment to meet future demand
.
” The damage to the epidemic during the epidemic has forced many oil-producing countries to postpone plans to increase production capacity or reduce the scale of plans
.


According to the definition of IEA, idle capacity is the output that can be used within 90 days and lasted for a longer period of time
.


Other organizations have different definitions
.
The U.
S.
Energy Information Administration (EIA) defines idle capacity as production that can be started within 30 days and lasted for at least 90 days
.
According to this definition, EIA expects OPEC's idle capacity in the fourth quarter of 2022 to be 5.
11 million barrels per day
.


  With the decline in crude oil inventories and OPEC's continued production cuts, spare capacity has become more and more important
.


  IEA said that while OPEC is acting, oil inventories will continue to decline
.


  However, the organization said that OECD oil inventories will rise again in 2022.
Although Iran's output is now sanctioned, it will increase in the future
.


  According to the report, oil inventories will increase by 800,000 barrels per day in the first quarter of 2022, 2.
1 million barrels per day in the second quarter, and 2.
4 million barrels per day in the second half of the year
.


  IEA said that if Iran’s sanctions are relaxed, the country will quickly put 1.
3 million barrels per day in the market
.