Cheap Oil is Here to Stay; Forget "Peak Oil," We Now Have "Peak Demand," We'll Never Run Out

CNN Money -- A growing number of experts are saying that oil prices will remain well below $100 a barrel as the economy remains fragile and efficiency measures kick in.

"The world will never run out of oil," Deutsche Bank analysts wrote in a recent research note, echoing the old logic that the Stone Age didn't end because the world ran out of stone. "If the oil age does end, it likely will be because we become more efficient and simply use less petroleum." It's this "becoming more efficient" idea that the Deutsche Bank analysts use to predict even lower oil prices in 2010 than now - an average of $65 a barrel next year compared to nearly $80 currently.

To get there, they employ a metric known as energy intensity, which basically measures the amount of oil used in relation to the size of the economy. The energy intensity of the U.S. economy has actually dropped by about 2% a year every year since the early 1980s (see updated chart above). In the next couple of years Deutsche Bank expects it to decline by around 3% as people buy more fuel efficient cars and respond in other ways to the high prices of 2004-2008 and as government conservation measures kick in.

"US oil demand may have already peaked," the note said. "There's so much spare capacity right now," said one analyst, noting that oil prices in the $70 range are still high enough to insure new supplies are being brought online. "It's very difficult to see prices much higher."