The OPEC logo is seen at OPEC's headquarters during a meeting of OPEC oil ministers in Vienna, Austria, June 5, 2015. REUTERS/HEINZ-PETER BADER
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As most of the world focuses on how unfettered oil production will weigh on prices, a few say a rebound is on the cards as the market starts to reflect a growing risk of shortages. OPEC's strategy of keeping its taps open is leaving a smaller cushion if there's an unexpected need for more oil. Members of the Organization of Petroleum Exporting Countries had about 1.1 million barrels a day of spare production capacity last month, the U.S. Energy Department estimates, compared with more than 4 million in late 2010 .In 2011, after unrest in Libya cut output in that nation by about 1.5 million barrels a day, OPEC members tapped into spare capacity as oil prices shot up above $120 a barrel. OPEC production rose to a record 33.7 million barrels a day in August as members followed a strategy of maximizing output to force higher-cost producers to cut supply.While U.S. shale production has declined slower than predicted after prices bottomed out, any output increases after prices begin to rise will also take longer than expected, according to Gunvor's Fyfe.Brent crude, the benchmark for more than half the world's oil, traded at $45.90 a barrel on the London-based ICE Futures Europe exchange by 1:25 p.m. Beirut time Friday.
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