1. Demand exceeds supply -
75pc usage of oil on transport - and massive shift of people in BRIC countries from lower class to middle class - is seeing them increase their demand for motorbikes and cars - and hence oil (watch out environment!)
2. Producers are more efficient - oil companies are more profitable at $50 than 3 years ago when oil was $85 a barrel
2. USA now supplying as much oil as Saudi Arabia, whose markets are now threatened - they reduced prices to get USA companies out the market - but this didn't work - USA companies actually came to the party and increased production .
3. There are many factors that will potentially make oil price go back to $100 per barrel and more ! Political instability, government intervention, scarcity to name a few
Short term oil price - low
Long term - they think will increase