If history is any guide oil prices could range in $40-100 band for a long time. We have long described the peak oil arguments in terms of rising cost of marginal production. If one looks at long-term charts of oil prices we can see that despite volatility and a number of decade-long bull markets, once supply catches up with demand, prices retreat to wherever the cost of marginal production has increased to. 50-60¢ was the level at which demand returned to dominance prior to 1933. After WWII prices were held at $1.80. The 1970s saw a great deal of disruption and volatility but prices stabilised above $10, which represented the point at which marginal supply was no longer viable. The upper side of that 25-year range was around $40, which remains an important level. A great deal of offshore and unconventional oil is uneconomic below $40. Likewise a great deal of the same production becomes highly economic around $100. If history is any guide oil prices could range in that band for a prolonged period.