I always feel most comfortable combining charts with what is going on in the real world and here's my take on that for what it is worth:

• Underlying strength of oil price is due to narrow / tight spare capacity, and my feeling is that is here to stay - peak oil.

• Hurricanes last year, and expectation of more hurricanes this year led to the price getting over extended - though I didn't understand that at the time.

• >>$60 is burning off demand in some developing countries, who in a few years time will no longer be importing any oil, but will be exporting increasing amounts of violence.

• I suspect some market manipulation ahead of US elections, and wonder if your mid-November date was not in part based on resumption of normal business once the election is out of the way.

• These factors, combined with lack of huricanes this year are the real world reasons for the decline in oil price.

• Lower prices mean that the poorer countries may re-enter the market.

• Lower prices may also mean capacity destruction in the OECD.  The oil majors, setting budgets as we speak, will be more cautious now than if the oil price were over $80 and heading north.

• So at some point, the price becomes irresistably cheap, bottom is reached and we start again.

• I will post in a few days on Chinese, US and EU demand trends to comapre with LADS export land trends - and I imagine that these two trends are heading in opposite directions - hence the developing world getting squeezed out of the market.

PS - in Boston I saw 2 or three charts of rig count and gas production, US and other parts where it was clear that the battle to maintain production is being lost.  There is little doubt in my mind that a full blown energy crisis is at the door.  If drilling was stopped, production would crater - and that is because all the natural reservoir energy has been used up - oil and gas is no longer pissing out of the ground at 50,000+ boepd / well anywhere.

It took a further 24 hours to track down my UK editor Chris Vernon - who was wearing a suit - that's what rank and social standing does.

So it is a tricky thing looking for someone when you don't know what they look like and probably don't know their name.

The reviews for the Buckminster put me off a bit to I went a bit up market and stayed at the Hampton on Massachusetes Avenue.  But we were in the bar in front of the Buckminster every evening.  The babes, by the way are part of Dave's sick humour - the ones round our table were much better looking than that.

Cry Wolf will soon get shot - and I will start posting under my real name, Lee Raymond.

I didn't ask how many "giant fields" there were then or now - I asked how many giants were declining in production due to geologic factors vs geopolitical - what caused the those bumps in the chart.  

How many times in the past did well-counts soar without a bump-up in production from the giants (inspite of better TeChnOLogy today)?  

The blips and bleeps in the vital signs may appear the same to you but the current patient's conditions is terminal.

"When we meet the peak, we will know it."

That's what those very surprised Texans said up until the early 1970s.

The information presented -
'Before he started his Saudi analysis, the broad concensus was always 15-20 mbpd was easily achievable....and at the moment things are going the way he - and essentially no one else - predicted 3-4 years ago.'

And here are the facts most people here consider fairly reliable -

1. 'Saudi is drilling like crazy' - or at least a lot more than in the past, for whatever reason - though the huge water projects aren't exactly a sign of a producer building reserve capacity. In other giant oil regions, like Texas or Alaska, these are very reliable signs of peaking production (and in Alaska, of directly related pipeline problems - which the Saudis may also increasingly face, as their maintenance, being a government company, is a lot more likely than BP's to be shoddy, right? I mean, if a private company like BP can ignore maintenance for more than a decade, than what must the Saudi infrastructure look like? Or will you change your logic in what is a sideline discussion about private vs government owned oil companies?)
   
2. 'Pouring billions into old projects' - including at least one where there still isn't a solid technical solution to refine the oil due to the metals in it - I'm not sure how developing such oil production is seen as a sign of a producer swimming in oil just waiting for the tap to be opened. It can be easily seen as an oil producer now attempting to pump every last drop out, however. And this seems to contradict the Saudis saying the world was swimming in oil last summer - if it was swimming with the ever larger share of heavy and sour crude, what is the market for essentially non-refinable oil?
   
3. 'Buying every rig they can get their hands on' - again, like with the drilling above, there is some room for discussion, including the fact that a number of the rigs are being leased, not bought. But there is no real question here that the Saudis are now becoming an expanding market for anyone who can drill offshore, though unfortunately, the market for such rigs took a real hit in the Gulf. Remember that? - the absolute number of such rigs declined after 2005, as did the production capability and infrastructure to support them - that the Saudis have not increased their offshore rig total more may be related to the fact that the number of such rigs available declined, not because they couldn't use them. There are more types of market constraint than merely the monetary or geopolitical - maybe the Saudis had planned on a production increase based on rigs drilling - and without the wells, production drops more than forecast? But notice, the rigs aren't available today either. So maybe, just maybe, the scheduled increase which was meant to mask production declines in other fields (or just allow production to be throttled back to a more sustainable level - damaging a field through over-production is also a possibility which adds complexity to what is going on in Saudi Arabia) is not available. Scenarios are easy to construct - just mine is pessimistic, and yours optimistic. Oh, and mine has some historical support - I am not sure any oil producer in the world has ever reached 15 mbpd, but you seem to be counting on it as part of your argument. If the Saudis hit 12 million (an 'official' top limit according to a former employee), you would still need to see a 25% increase to meet your projection, which is still 33% higher than production today ('I think they can, I think they can...' might be a good story, but it isn't exactly reality based - '...and they lived happily ever after' comes to mind too.)  
   
4. 'And seeing flat/declining production.' And that is the point, isn't it? At least measured by numbers, Saudi production, is declining from a higher level. Nothing new there at all. What is new is points 1-3, essentially predicted by Simmons. Or not so new in his case, but now more in the nature of confirmed observations, not reasoning based on factual premises and historical awareness.

Oh, you are keeping up on the Norwegians, and the continuing series of production cutbacks, right? Peak oil is what comes out of the pipeline, and regardless of the projections of increasing production, there seems to be no provisions for announcements of problems - in other words, anyone correcting their 2006 projections due to another missing 100,000 barrels a day or so? - it seems as if the Norwegians have wiped off quite a bit from the anticipated production - or is ca. 10% just a rounding error? I mean, add in Nigeria, and suddenly, the market is already either pricing unanticipated production drops of fairly major scale - for example, Alaska is getting a bit unsteady, and the weather continues to be very unusual in many regions of the world - or demand really is sinking like a rock. Or a number of other factors - for example, could the 'brimming' oil storage in the West be a signal to Iran - after North Korea showed that they are now a globalized player on the nuclear scene, is it time to get serious about Iran and its stated ambitions to follow the path of righteousness as ordained by God - after all, if the Iranians are following the American lead in trusting God for policy, why shouldn't they also follow up with the tools needed to follow God's will where it leads. (The naval exercise with Coast Guard and the anti-nuke New Zealanders amonth others is pretty clearly designed to keep Iran focused on the point that buying whatever the North Koreans are selling in terms of kilotons TNT equivalent is just not acceptable, and much like a de facto blockade, it would be considered a quasi act of war.)

Another of Simmons' major points is that infrastructure plays a larger role than most people seem to understand. And that the infrastructure is real creaky - and that was before a few hurricanes damaged one of the world's premier oil infrastructure regions.

I am very agnostic about causes of peak oil too, but pipelines also play their role - and how much production did the U.S. lose in 2004 and 2005 because  of the weather? And note that it wasn't merely sunken of damaged rigs - pipeline networks were also destroyed in underwater landslides - in other words, were the rigs were still in good shape, the pipeline was gone, and where the rig was gone, the pipeline was still in good shape - synergy is not only a positive effect - in this simplified case, 50% percent pipeline loss and 50% rig loss leads to 100% production loss. Obviously, to the extent possible, the working rig is moved to the working pipeline - but it is that extent possible which still remains part of the real world - if the working pipeline is 1000 ft down, but the rig  has a maximum working depth of 500 ft, you are still at 100% production loss in the real world - however, I am sure you can statistically prove that reality isn't the point under discussion if you work hard enough.

This is simply meant to point out facts and reasoning from them. What is happening in the market is starting to become a touch constrained by the facts - sinking demand and sinking production are certainly related, but possibly, the sinking production has less to do with demand than in the past. After all, the U.S. hasn't had any 'false peaks' for a good half generation - but then, as reported here, a Texas state geologist said there is no reason to think that production can't return to 1970s levels.

Well, some of us think that well, yes, there is a reason or two to think that production will never return to those levels.

Sometimes, I don't think you grasp we aren't all talking about timing the way you seem to think - the difference between Thanksgiving 2005 and Easter 2007 is still less than the amount of time Thunderhorse has spent not producing after its planned start. And that project represents something around 5% of America's total oil production.

It is very difficult to deal with depletion, because it is reality, regardless of your own desires about increased Saudi production shifting peak production to 2011, or 2014 - and you would still talking about less time than the ongoing effort to get Thunderhose producing - or is a couple of hundred thousand barrels a day insignificant? After all, that is the scale of many of the newly announced projects in Saudi Arabia. You can see this process of reality still being dismissed as not relevant in human affairs not only a generation after it occurred in Texas, but today in Great Britain and Norway - it just can't be right that the oil runs out, since we are such masters of the world around us.

Except that the oil does run out, though if wishing it didn't would change the world, then we wouldn't have any problems at all.