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Saudi oil production is down -- what does it mean?

Economist James Hamilton and commentors examines the possibilitie. Is it high inventory, like the Saudi's say? Hamilton doesn't buy it. Are the Saudi's trying to keep prices high? Is there a distribution bottleneck? Or Saudi Arabia closer to the bottom of the barrell -- is the quality of newly pumped oil so low these days that refineries can't handle it? Can they just not pump any more?

If it's the latter, then this story is the equivalent of the assassination of the archduke of Sarajevo for our time. Here's hoping that's not the case.