The last few weeks have seen a huge drop in the price of crude oil (and gasoline, but not air fares). This has been attributed to the Saudi's keeping the taps on. The argument is that they are trying to drive the US frackers out of business, which seems reasonable. And of course they can just as quickly reduce supply driving prices back up.
What is missing from the discussion is that the structure of the industry has changed. The cost of entering is now orders of magnitude lower than it used to be. A useful parallel is the change from integrated iron and steel making to mini-mills.
The industry has been controlled by an oligopoly (OPEC) which could coordinate output and therefore control price. But with a large number of new entrants, none of whom are part of that cartel, the industry has become, at least at the margin, highly fragmented.
And we now have a contestable market; so if OPEC wants to keep the frackers at bay, it will have to keep the price below their costs which are falling as fracking technology improves. So the Saudi's can certainly put a lot of frackers out of business, but as soon as they reduce output and the price of crude rises, there will be more waiting in the wings, probably with better, cheaper technology.
All of which suggests that lower oil prices are here to stay, at least in the medium term.
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