He also acknowledged a "growing conflict between downward pressure on economic growth and excess production capacity".

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It just does not make sense to believe that they have excess production capacity but that it somehow does not fit with the worlds refining capacity.

FORBES: Why I think Saudi Oil Production is now at Capacity

First, there is excess production capacity.

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Saudi engineers have been working on several big projects that could boost the nation's output by 1.3 million barrels a day--more than the expected increase in global demand next year--but the secretive nation is "likely to keep its political tool, excess production capacity, close to its chest until it has a new U.S. president to win over, " Edward Morse writes.

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The result has been production capacity far in excess of Chinese consumers' willingness or ability to consume.

WSJ: China's Consumption Conundrum

There is more to this than the eradication of excess capacity or the shift of production inland.

ECONOMIST: Chinese business

Having the most excess capacity, Good tells Forbes if any OPEC country were to cut production, it would be Saudi Arabia and since they refused, OPEC had to keep levels where they were.

FORBES: Saudi Arabia Keeps OPEC Spigots Open

To rebalance an economy with excess capacity and to continue growing, China needs domestic consumption to grow much faster than domestic production for many years.

WSJ: China's Consumption Conundrum

"There has been excess pipeline capacity coming from western Canada for more than a year, and you haven't seen significant production growth, " says Pursell.

FORBES: The gas trap