I would say one thing that would be very important when analyzing future SA rates is that only looking at C+C needs to stop. They have major GTL projects, as well as huge additional refinery capacity coming online in coming years (ie they will be exporting less crude and more refined products).

The refinery capacity that they are adding makes it sound like they are much more optimistic about their future production than many around here.

"At what contract price (not spot) would u agree that your hunch and position is in error ... and we'll wait and see?"

That depends on the psychology of the market participants.

"Last autumn, i was almost alone in forecasting'

Lets all give fast freddy a round of applause and a pat on the back of the head he so desperately needz.

Freddy

First, this site is mostly interested in po, not peak prices. Regarding the latter, you predicted low prices because your lot predicted record production. In the event, production plateaud but we had another warm winter, and it is weather related demand destruction, not price, that is the real reason prices have not gone back up even tho storage is down to last year's. THere is absolutely no indication that the major consuming nations are cutting back on account of price. Regarding po, your consensus projections' predictions for 06 were for significantly higher produciton than 05, and there was no recession even as avg price hit a nominal record for any year... so, your continued hopes for higher production in future years should have a logical explanation for last year's miss, otherwise you should join peak now.

Second, I posted the following reply to a comment you made a week ago... the new format lets me see my comments, but not whether they generated responses, so maybe you can't see it:

As I told wt, no month will be remembered as a peak, just as no q will be. What is important is the peak year; the interesting points are a) that a great 3q was not able to bring 06 above 05, and b) that 4q dropped back quickly, indicating that 3q production level is not likely to continue.

Your comparing the 1999/02 plateau with the current one is like apples and oranges... then, the US, japan, and parts of europe were in recession, and prices were low. The current plateau is happening with good gdp growth and record prices. Everybody, not least sa, is producing balls out. Not one barrel was left behind last year on account of low prices or demand destruction, excluding only the modest cutback by opec nov/dec. In spite of this, all of your contributors, including colin, over predicted 06 production, and by a lot... what, indeed, was their consensus for 06 production? This is a serious question, and one which you could answer if you are willing to... but, I don't really expect an answer as it would undermine your position.

Meanwhile, stuart and his plateau was right on, and wt was not far behind. Something seems to have gone awry with your consensus, given that nominal 06 prices were at a record high. What might have happened?

THe peak oil now (pon) crowd thinks major producers are declining at a much higher rate than your lot expected. north sea, sa, mexico, us gulf, china? (certainly daqing, but anyway a bit murky there), etc. us historical decline data does not work for the rest of the world because of the high tech, eg horizontal, is allowing fields to be produced at a higher rate at the end of their life, naturally leading to very rapid decline rates. Old on shore fields are being produced exactly as off shore fields are, and will therefore have similar decline rates. This certainly appllies to nearly all sa fields, not least ghawar, and probably iran/q8 as well (the latter may anyway have to reduce production on account of parliament wishing to limit produciton to 2% of actual, as opposed to imanginary, reserves.)

A reason mentioned by a few is equipment. Your fav IEA says there will be no problem "as long as the necessary investments are made." IEA probably meant financial. But, what if what is necessary exceeds the world's available rigs? SA is increasing rigs as fast as they can, which is already slashing us gom ng production. And, while sa produciton is no doubt higher now that they have 60 rigs than what it would be if they has stayed with 18, production is nevertheless declining fairly rapidly.

Colin, thrice bit mostly on account of deep offshore in s. atlantic basin, is naturally a little shy. IMO he is looking for ngl production to come on line faster than is likely.

How long wiil we manage to cling to the plateau? How long will new fields (none in sa) manage to make up for accelerating decline and equipment delays? We'll just have to wait and see. Your conviction that production will soon revert to an upward climb should explain why 06/05 was flat. You have been turning Economics 101 on its head; economists normally claim that high prices lead to higher supply in a free market, not that high prices lead to lower or stagnant supply.

BTW, how interesting that it is all happening at once. US ng peaks in 01, canadian ng in 02, world oil in 05/6, the us now inporting coal as GB and western europe desperately looks to import oil and gas... We live in interesting times. Lets hope for more warm winters, which is the real demand destruction these days, not price. Consider that high ng last year boosted fuel oil demand, missing this year...