Ignorant -

I am ignorant as to whether any economist has actually put forth a classical Econ 101 type of of supply/demand curve for gasoline that even halfway reflects reality and even halfway has any predictive power.

Or is it more the case that both the supply curve and the demand curve are constantly being changed by a whole host of influences that are probably not even fully known much less quantifiable? And in the real world, does supply and demand for gasoline ever really come into equiibrium or is the very notion of 'equilibrium' just a convenient construct, say like a 'point mass' or 'ideal gas'?

As you may have guessed by now, I am not an economist, so maybe these questions are off base, but I get this nagging feeling that many of our basic economic assumptions are due for a major overhaul.

Call me curious. Just where do "many" economists miss grasping the concept of the laws of supply and demand? Do you mean they have a poor record of predictions or exactly what? Please be specific.

I think the current oil price is driven mostly by hysteria about a recession and the expectation of falling demand. If the summer price was overvalued the current price is undervalued. My impression is that oil consumption around the world is not too discretionary. As you note the recession will hit oil production not just demand, specifically all of the expensive projects to extract oil under difficult conditions which is increasingly becoming the norm. Most analysis I see in the media assumes supply is not an issue. In the near term this will appear to be the case as the poorest sections of the third world our outbid for the few millions of barrels per day they consume. In the not-so-long term this slack will disappear as there is little evidence of transition to an alternative energy economy.