Nice links, Adios. The link between price and demand is well understood - though the markets often have trouble with it, and not just in oil! The turnround in demand right now should already have capped prices, but it hasn't - which means the price reduction, when it inevitably comes, will be the more severe (the parallels with WWWs house market analysis are striking!). The oil industry is indeed ramping up exploration and investing in new recovery technology which will result in recoverable oil reserves increasing substantially. At the same time, the very high price of oil will drive efficiencies in all areas of consumption - and these efficiencies will not be substantially given up even when the oil price starts to reduce, which results in further downward pressure. The short to medium term outlook for oil prices, therefore, must be down. Long term, oil will again get more difficult to extract using the wells and technology that exists, and prices will once again rise - but by then we may well have new fuel technologies which will move us on from oil, as we once moved on from coal.
Interesting stuff - and all directly relevant to the airline industry.
Scroggs