This week the State Department accused OPEC of hiding spare capacity exceeding 1.4 million barrels daily. It urged the cartel to use it to stop the oil price rally that has continued uncomfortably close to midterm elections. The request—or demand, depending on your interpretation—is unprecedented and it might do more harm than good. Bloomberg quoted a veteran energy analyst from Jefferies, Jason Gammel, as saying, “This is the lowest level of spare capacity in the global system relative to demand that I’ve ever seen. Spare capacity is moving to a precariously low point.” The problem is, nobody seems to be certain exactly how much OPEC’s spare capacity is. In its latest Short-Term Energy Outlook, the EIA estimated OPEC’s spare production capacity at 1.66 million bpd . But the International Energy Agency last month estimated OPEC’s spare capacity at 2.7 million bpd and is fast declining. What we do know, […]