NC
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/23/bcnoil123.xml
The most salient paragraph perhaps:
"High prices and slower economic growth have driven oil demand in the US lower", he said, "With oil prices above $80 for nearly a year and income growth weakening, demand elasticity has begun to show signs of life."
So inelastic supply combined with inelastic demand drives prices higher in response to small changes in demand. CX is a prime example of inelastic demand, the price of kerosene more than doubles in 12 months and CX's demand response to this price rise (for whatever reason) is to increase capacity, and presumably kerosene consumption, by over 20%.
Inelastic supply of kerosene in Asia is especially relevant due to refinery capacity shortages in the region.
No mention in the article of speculation, which may lead to market volatility and some price overshooting, but not the current price level.