They say that the market is ruled by two human emotions: Fear and Greed. There is an oversupply at the moment; exactly how much is anybody's guess. When that supply gets pulled down close to the demand, greed will take over and the price will go up.
Add to this the undeniable reality of China and India steadily growing with billions of consumers, and the world will be using a lot more oil in the next few years.
Technically, there are any number of expert economist opinions regarding today's oil prices and economic performance. Some of the price swings are well interpreted here. As mentioned above, in the long run prices are most likely going to be chugging uphill once again.
This would be a great time to position yourself for walking, biking, mass transit, or becoming the owner of an electric vehicle. There will be a lot more of these in the future.
Today's oil prices may be down for the moment, but they're not down for the count. Prices in the long run are going one way - up. There is no way to know exactly, but it seems likely that as soon as the economy picks back up, so will oil prices. This is just an observation, but there seems to be an amazing coincidence between oil prices and the economy these days.
The official position on oil prices would seem to mirror this observation somewhat. According to the EIA, they are looking for crude oil to continue an upward trend for the foreseeable future. Other estimates mirror this view.
Oil is like any other commodity. Its price is determined by supply and demand. As demand (the economy) picks up, more oil will naturally be used. One thing about oil is that there is never a huge oversupply any more. This has to do with the amount of oil it is physically possible to produce, though there is active debate in that regard. See Peak Oil Myth for more on that.
