There hasn't been a huge increas in demand for oil. Some say a tiy decrease but there's an argument for a small increase in demand.
But the supply side is falling, old fields are becoming less productive. With a product such as oil where demand is not elastic (as proven by UK example where forecourt prices have doubled in afew years to the equiv of about $13/gallon but people are driving more) it only takes a small reduction in supply to remove the equilibrim and shoot prices higher.
Oil production cannot be suddenly ramped up. Lead time from discovery to forecourt is restrained by availability of rigs, tankers, personnel, pipelines and refineries. These 5 factors are in high demand at present and it is real demand, not futures driven, so why should we assume the price of the underlying product is living in a different universe to the supply of its infrastructure? I see $200 oil before $100 oil. Maybe even this year.
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