Oil update

So, analysts are suggesting that Saudi Arabia may have already boosted oil production by more than it's telling people. (If I understand correctly, they do this by looking at the availability of heavy and light grades of crude; Saudi excess capacity is in the low-quality heavy grades, and there's evidence the market may have a larger proportion of heavy grades than it would if Saudi Arabia were keeping to its official quotas.) If this is true, the bottom line(s) would be:

1) Current oil prices already account for significantly boosted Saudi production - they've stayed high anyway. The article suggests that normally when the Saudis overproduce, it shows up in the global economy as excess inventory, essentially building up a buffer. In this case, however, it looks like consumption is high enough that that excess oil is simply being consumed straight away.

2) The Saudis have less additional reserve capacity available than was thought - meaning that if there's further unrest in the Middle East, their ability to keep oil prices in line is more limited than was thought.