Hmm ...

I think I've heard of someone mentioning this possibility :)

Note it probably was not really 4mbd drop in six months. Higher chance is the 2008 production numbers are bogus and its been a fairly smooth decline to this point since 2005. We are I believe dropping fast now but closer to 4mbd every 12 months. So the drop itself was not real. The real decline rate is steep but I think half of what the current numbers are showing. However the drop is accelerating how much is effectively unknown.

I've guessed anywhere from 4-8mbd in 2009. 2.5-3 is probably not a bad guess. But given our current situation with probably ample storage. I don't believe its anywhere near as high as claimed but this does not mean that OECD countries are not currently well supplied at least in the middle of the five year range if not higher.
My best guess is overall we are really between the middle of the 5 year range for storage and the top. I don't believe we are actually over the top any more than we where in 2007.

However for a lot of reason I actually believe that the current production numbers being reported are real since they are used to support the lie of OPEC cutting back.

I give the chance of OPEC announcing another 2mbd cut after having "achieved" its goals at on of the next meetings a very high probability.

So the bad news scenario is not actually as bad as whats being presented its just at the moment for political reasons we happen to be getting good numbers out of OPEC. non-OPEC however is now questionable.
The rapid build given what we know about underlying decline in non-OPEC fields is questionable.

One of my predictions was that if my theory is right that GOM production would collapse in 2008 so far reported production is showing that the new fields that came online completely covered collapse. In addition given the timing we somehow managed to make a perfect production recovery from the Hurricanes despite the financial turmoil. And the fact that after all other hurricanes some production was not brought back online.

So we now seem to have OPEC telling the truth and US production looking questionable. GOM numbers seem to high even with the new fields coming online. Here I think the new projects are close to peak production so even if the absolute value is wrong one can watch with interest how US production changes over the next several months. If there is a real underlying decline then one would expect that once the new fields are fully operational we would again see a steady decline set in. Probably from the wrong absolute value and maybe even with the wrong rate but if we are entering fast collapse and its real the GOM production overall should be crashing and the rapid ramp up of the deepwater fields will quickly be swamped by overall decline.

So you still have a mini regional collapse model that can be proven or disproven without looking at the whole model. If collapse is happening then GOM must be one of the first regions that collapse.

Of course the model could be totally wrong but given the current numbers we are rapidly reaching the point that we can start discarding lots of models about future production. The idea of fast collapse could well hit the dustbin in the near future. If we don't see continued collapse in production and high oil prices by the second half of 2009 at the latest I'd suggest its highly doubtful that this concept is correct. Given that it sets the real peak back in 2005 we just can't go much longer without fast collapse becoming obvious if its real. You can get a bump in production in the fast collapse model but the production from 2000-present is treated as the bump at the end. The bump in 2008 is not real you don't get that sort of brief increase with any stable production model you have to see a multi-year bump if you will from real production. Thats not to say that you might not get one from some seriously unsustainable production modes but that makes it even less relevant to a larger model and even more likely to have caused additional damage canceling out the brief rise.

So for now watching US production closely over the coming months will be interesting. How the GOM production changes once the large new fields have hit maximum production is of EXTREME interest.

Outside of my prediction of and announcement of a additional 2mbd cut from OPEC I expect after this if prices do rise that OPEC production numbers will again become unreliable but with US GOM production becoming a bit more reliable in its direction of change and even its rate with the absolute value off a bit.
With luck we get good reporting and can get a reliable slope. Given the way things are going I'd not be surprised in the least to see US production go up 500-800kbd and hit a flat line regardless of the price changes in oil. Same for US storage levels for that matter :(

We just have to hope that at various points in time the need to tell lies results in people publishing the real data as the easiest way to support the current lie. I think that periodically as you look at the political situation that different areas do report real numbers. Russia and Norway are two that generally are very consistent having basically no ulterior political driving force to slant the numbers.

The nice thing is these two act as proxies for a lot of the worlds production so you can believe that whatever is happening in Norway and Russia is probably the truth and that the rest of the world is not all that different. This suggest that most of the worlds fields have now entered decline at the minimum.

One of the interesting things coming out of the forthcoming update to the our (Khebab/Brown) top five net oil exporter paper is that there is not much difference between the middle and high cases regarding the post-2005 50% depleted mark (when about half of post-2005 top five cumulative net oil exports have been shipped). It's between the end of 2012 (middle case) and the end of 2014 (high case), or seven to nine years after hitting the apparent top five net export peak.

Indonesia hit the post-1996 50% depleted cumulative net oil exports point in only a little over two years after their final net export peak, and they were 100% depleted in 8 years (assuming that they don't get back into the net exporter category).

It would be nice to have some accurate net export data for the US in the 1930 to 1948 time frame (from discovery of the East Texas Field to zero net oil exports), but assuming that the Second World War was the peak for US net oil exports, the US became a net oil importer only three years later, in 1948.