Upside for world oil prices

 Spare capacity for OPEC

OPEC spare capacity is down 26% in the last year to only 4.685 mm barrels per day.  OECD stockpiles climbed only 11.4 million versus a 5-year average of 43.2 mm, so there is less inventory build across the globe.  Saudi output, at 9.65 million barrels per day, is slightly down from 30 year highs hit in August. 

 Saudi oil production 

The spare capacity is still large and is not at the low levels seen before  the financial crisis. However, the low spare capacity in early 2008 s the period when we saw a large spike in crude oil prices. The decline in spare capacity suggest that growth is increasing, but it also means that if there was a geopolitical event that disrupted the oil markets, prices could go significantly higher.

 Brent oil has increased with Libyan problem and now Iranian risk

The global oil market will remain tight under the current environment.