It was a known fact back in 2007 that the breaking point price where oil prices in the U.S. would break the economy was around $90 per barrel.
This is to say the oil prices at or above this level can have such a negative effect on the economy that it shrinks and causes the volume of consumption to go down in a negative way that changes the supply / demand ratio required to sustain the price.
The problem with this fact is that it takes about 6 months to measure it in the economy as a trickle up/down and over effect.
The current minimum price to have sustainable growth in the economy is around $85 per barrel.
While a investor can make money in a short term trading range over those amounts, they can not be sustained more than the 6 months it takes to realize the effect.
If you do not believe this, grab your price charts over the last 6 years and show me where oil has been able to sustain $100 or above more than 6 months. The higher it goes above this level, the sharper the decline after it has been absorbed into the economy.
Of course there are more plays going on now of oil in the US from non traditional sources but this only changes the trade balance and requires prices be at the level of $80 to keep exploration and production up from these sources. Below $80 this type of production will go down, tightening supply and raising prices.
This will keep the real OIL trading range between $75 and $95 per barrel.
While the real control of prices outside of these trading limits seems to be created by the investment banks who push fear in the market to encourage investment in oil that the investment bank itself is holding (conflict of interest), it can only be a short lived change in prices.
Like it or not, the economy runs on oil and has an exponential effect on everything we do and jobs, growth and the price of food and minerals used in everything we build and transportation to get it where it is going.
If you invest in oil, watch where you are in the price curve according to timing of this swing range.