For anyone who may have missed it, I suggest a viewing of Matt Simmons presentation posted on TOD US the other day.

http://www.theoildrum.com/node/5130

Matt makes the argument that oil not only will go up for all the reasons he states but that it SHOULD go up, in fact MUST go up,and soon.

Despite what many people seem to think, a stable, rational oil price is not a bad thing, even if it is a bit higher than we have historically been used to(which in many cases has been insanely low).
There must be some form of rational pricing structure to insure continued investment in the energy sector or we could end up with a catastrophe with or without peak oil that is purely logistical, and due to the long lead times needed in the energy industry massive dislocation could not be averted.

As far as price goes, supply and demand seem to matter only at the margins. We cannot know if this is the time, but the hedge funds are certainly regrouping for an onslaught on the oil market, which means that any real predictability of price is virtually impossible. For the hedge investors, there is simply very little place for money to go. Interest rates are near 0% (leading to the surreal economic landscape in which money is free in a land where money cannot be gotten!) real estate and equity markets are in full collapse and still not trusted. One more dash to the commodity well is in order, followed by a dizzying ride upward, and then another price crash. Would the production of oil be up or down during in such a period? Who would care?

Until we find someway to reign in the rogue money waves washing across the economic landscape, or offset them with an enourmous pool of capital from...?, we will be subject to this roller coaster until it shears the world economy into small pieces. And even then, when we are living in village communities cut off from all the advances we once knew, the crude oil will lie in the natural reservior never exploited. If your worried about climate change, the hedge funds may turn out to be your best ally, destroying the economic ability of the nations of the world to extract the oil that would heat the atmosphere. They are the economic equal of the vandals who in attack after small attack ripped Rome to shreds, except these modern vandals use dollars, yen and Euros instead of swords, axe and spear.

RC