The size of the oil supply depends on the price (and visa-versa)

[napoleon_in_rags]

11. That misses the fundamental dynamic.

This stuff used to spew from a cow field in Texas in the form of a "gusher", just waiting for somebody to put it in barrels. So why are they drilling two miles beneath the ocean like they were in the BP spill instead of in another cow field, which is perfectly safe? The reason is that the cow field oil wells in the US are ALL empty, the remaining oil is more costly to get to, in places like deep beneath the sea. Google 'peak oil' for more info on why the time of hard to reach oil effects markets a lot.

In this context of expensive hard to get to oil, it doesn't matter if we are using as much as we were in the 80s, if its more expensive to get to than it used to be, thus the higher prices.