Econbrowser: Questions remain about Saudi oil:
It’s also interesting to note that these drops in Saudi production have coincided with a huge increase in Saudi drilling efforts. The graph below, taken from the Oil Drum, shows estimates of Saudi production from the U.S. Energy Information Administration (green line) and International Energy Agency (purple) along with the number of oil rigs in operation (blue). The Saudi explanation is that they are aggressively trying to develop more excess capacity, though, if that’s their intention, why not use existing capacity to prevent the price from rising to $75? One can’t help but wonder that, when Saudi production peaks, the graphs and official statements might be quite similar to what we’re seeing right here. That possibility is conceivably one of the factors driving those investment funds to keep on buying oil futures.