I was typing an edit when you blocked me out, with your response.

What we had in 2005 in Saudi Arabia was a high level of production at a fairly advanced stage of depletion, so I knew that the decline would be past 58% of Qt.

Of the HL plots of large producing regions that I have looked at, Texas showed the latest peak, as a percentage of Qt (57%).

Since Texas was also the prior swing producer and since I could find no examples of large producing regions showing sustained steady increases in production past the 55% to 60% of Qt range (and given Matt Simmons' book), I thought that 2006 was the most likely year for a decline, but I agree that it had to be by 2008.

So, the Lower 48, North Sea, Russia, Mexico and the world fit the 50% of Qt model.

Texas and Saudi Arabia fit the 55% to 60% model. What Saudi Arabia has demonstrated is that we still have no examples of large producing regions showing sustained, steady increases in production past the 60% of Qt mark.

OK Jeffrey, I am going to do something I should have done a long time ago. I am going to do something that every fan of the HL method should have done a long time ago. I am going to investigate the precision in my next post.

Here is what I would request from you. Define for me the parameters in which you would say "That region has peaked." I presume this is not a problem. I am thinking 50-60% Qt with some defined intercept. But I am going to let you define the parameters, and your reasoning. Then I will proceed with the analysis. Texas and Saudi will be my test cases. My hypothesis is that the precision is going to be very poor.

I'm sticking my oar in here because I wasn't convinced by Stuart's explanation of the SA production curve. I'm backing RR in this debate. It's too early for the SA peak.

First, demand. The global economy is slowing - witness Alan Greenspan's comments last week on the risk of a US recession in Q4. It takes up to 2 years for rising interest rates to effect the economy according to the Swiss central bank.

Then supply. Not only is oil demand slowing but a number of large projects came on stream last year. I think we are seeing SA cutting production because the demand isn't there, just as they say.

Why try too hard? The Saudi's don't need the money right now. They have seen the world economies cope with $60/bbl so that is likely to be their preferred price. If the futures price is in contango you make more money by deferring production.

IMHO Stuart is reading too much into his SA chart. There are two variables at work - capacity and demand. I don't see how you can tell them apart. Surely, prior to global peak, the oil production curve is a demand curve. There has been spare capacity for most of the last century. If demand had had a different shape (World War III, bird 'flu, asteroid strike, anything) then production would have looked different. And that would blow HL out of the water.

Bottom line - we are looking through SA's swing producer role. We don't know what we are seeing. Moreover, my bet is that SA will produce as little oil as possible from now on.

Does anyone know how I can change my username to DemandSide? ;-)

Robert, correct me if I am wrong.

No, you are absolutely correct. And I am doing my best to prepare as if peak is upon us; I am making changes in my life and trying to set an example for those around me. My main concern - explained above - is that if peak is still 4 years away we are going to completely lose our voice because we called peak now, and the 4 years are going to be lost time.

I think you are kind of new here

Yes, just a bouncing baby meathead who finally has figured out how subthreads work...I think.

What if production starts to rise next year? He, and others who have been calling peak last year or in 2005 are going to be finished prognosticating. The influential people who repeated these claims won't be taken seriously on this subject.

By that logic he is out in right field and and you in left, while the ball is somewhere in the middle. Westtexas takes a risk in loosing credibility while you with caution hold back and risk losing a lot of important years. Each of you strike me as intelligent people but, in your individual rigors, perhaps both going to miss the ball. I would suggest a large net that the two of you hold up for a possibly, maybe, sure 'out' on.P.O. (of course nets don't always succeed...I've been out and about for a mighty long time).

and now to tackle a greased piggy-wigg...the Parent subthread...whatever that ferocious looking creature is.

I think I starting to understand why you are having some difficulty here. You appear to be gazing at the US navel exclusively.

I am not the one having difficulty here. You see, I actually understand what takes place when crude tanks start to fill up. I understand a bit more about the physical constraints than you seem to believe. I have been there and done that. I also understand that some factors that affect U.S. refineries affect other refineries in the same way.

But you seem to have a selective attention span. Again, we know more about the U.S. than any other region, and we do have good information for the U.S. The U.S. is a big customer of the Saudis. We have OECD data. We know when and why refineries do maintenance. But you want to ignore all of this, so Presto!, in your mind there’s nothing there to see. No relevance, no significance.

I, following Edelmore, ask for information on Saudi exports and you propose a link to US imports.

There’s that attention span again. He asked “how much of saudi's oil does the us consume directly?” I cited the information and gave him the link. We don’t have data on all of their customers, so we try to interpret what we have, and we try to fill in the blanks based on other factors. You know, like Jeffrey’s “export model.” He doesn’t know the sum total of Saudi’s exports either, but that hasn’t stopped him from sounding an alarm bell that exports are down. What he really means is “some imports are down.”

I propose that the way to deal with rising inventory is the usual way to clear markets (within your metaphor - drain), by lowering prices.

So you propose, when tanks are filling up, that we lower the price on the crude? The U.S. was already buying more than they need; how is lowering prices going to help the crude tanks go down? I think you are very confused here about crude, products from crude, the refinery constraint between the two, and where the significance lies.

Well, subtracting US consumption as shown in the aforesaid link of Saudi Arabia oil from EIA reported Saudi production levels, does suggest that there are other customers for that production elsewhere in the world, and that this lot is buying most of the stuff.

Of course they do their refinery maintenance at the same time as everyone else. Again, review my debate response to Jeffrey. None of this is new. All of this has been covered.

I note, for example, that while crude oil stocks in the OECD Pacific countries grew by 5.4 mb in the first quarter of 2006, they were at the end of 2005 almost 14 mb below 2004 year end levels (down 2.5 days of forward demand) and nearly 23 mb below 2003 year end levels. Was their bathtub overflowing?

I honestly have no idea what you are talking about. Here are the data on total OECD – which includes Pacific countries – and it shows inventories growing during the time in question.

http://www.iea.org/Textbase/stats/surveys/oil_web.xls

My guess is that you are looking at total inventories – which includes refined products (irrelevant for obvious reasons) but you are going to have to start citing some sources if you want me to address the claims.

You could be right that there is a way, but, no, you did not see any report containing aggregated data for the types of crude in commercial US storage. And so, no, you do not have much more than a fuzzy picture for the half of the world. And even then it is a half that represents less than one quarter of recent growth in oil consumption.

If you wish to argue that perhaps inventories were filling up because the crude suddenly heavied up, then it is up to you to demonstrate that. I have shown actual data demonstrating that refineries were down. Do you think refineries that are down continue to buy crude at the same rate? Do you think the rest of the world doesn’t do maintenance at the same time as the U.S.? If you don’t, please explain why.

Honestly, Robert, I've been googling and yahooing and haven't come up with any reports from anyone. I suppose you might swear to having seen them, but, frankly, I'm starting to wonder if your imagination isn't playing a whole bunch of tricks on you.

OK, I think we’re done here. Believe what you wish. You have yet to address any of my arguments with anything but “unknown factors might refute you.” When you dig up some of these unknown factors, let me know.

But one more thing:

I'm not surprised that you refuse to deal with the Contango argument…

Other arguments I refuse to deal with: What phase the moon was in, who won the Superbowl that year, and what Nostradamus predicted.

I will explain again. Very slowly. Contango has no relevance when crude tanks are physically filling up and we have data that tell us why (refinery utilization is down). I don’t know how to make that any clearer. I am not going to deal with an irrelevant argument.

It's sort of like the theoretician and the research scientist. The theoretician may have it in his head how things should be, but the scientist working in lab knows how it really is because he has conducted the experiments.

Now, unless you have some new data (or some data at all, I should say) then I think we are done. I honestly can’t continue to waste this much time on this fruitless discussion.