Several months ago we discussed the Monte Carlo  simulations run by the USGS in 2000 that automagically "found" about 1 trillion barrels of yet to be discovered or recoverable oil.  In the report referened above you can find out a little more about that method and its failure so far (over the past 5 years) to even come close to reality.

The authors note tht the 95% scenario of USGS is closest to reality.  As I recall, when reading the 2000 USGS report, this model pretty much conforms to predictions by ASPO and like mided modelers.

For those who want to have at the USGS 2000 estimates: try this link  Note: their predictions for natural gas are here too.

As far as the Saudi numbers go, it's not clear but when you add in the Hubbert Linearization done here previously for Saudi Arabia, I wonder if that rise above the line is like the East Texas line, rising due to managing the tail but not really indicative of more URR?

Given the Saudis inability or reluctance to increase production the last few years despite much rhetoric about doing so, those Hubbert Linearizations make interesting points of speculation. I also saw the recent Saudi request for a "roadmap" of future oil demand as a bit of politcal posturing enabling them to avoid (once again) raising production by throwing the issue back at the consuming nations.

What really matters though are the large discoveries from fields yielding enough oil to sustain the worlds consumption for several months. The last "super giant" field discovery was the Kashagan field in Iran in 2000 with 10 billion barrels of recoverable oil. Enough to sustain current world consumption for 112 days.

Of course actual demand and output may be wrong, but what is most striking is that crude output is nearly always above refinery capacity. Crude that can't be refined has no value (well, not today), so if this case is valid product prices should rise (refinery capacity remains lower than the 1% demand assumption until mid 2009) while crude should fall. Mid-2009 is also when refinery capacity exceeds crude output, so crude prices would be expected to resume climbing at this point.

THis helps explain Saudi complaints regarding the west's failure to expand refinery capacity in line with their own demand growth, and also explains their own plans to add refineries.  And, it might explain oil companyies' reluctance to expand theirs; refineries' profits are growing sharply while the major's crude output is beginning to decline. It is OPEC that hurts - they might have to cut output to maintain prices. OTOH, peak is delayed while high product prices encourage thrift.

It would be great if future peak models include refinery capacity.