Oil prices are down almost 50%, but demand is only down 5% YOY?

Why do oil prices rise and fall by a large rate than demand? I understand that is is speculation - but if demand is expected to change only an average of 3% each year, shouldn't oil prices remain pretty consistent? I get the value of the dollar argument as well - I am looking for a straight answer as to how the fluctuation can be so volatile and we settle for that... How are you supposed to budget? Oil prices should not fluctuate drastically unless a matching decline in the dollar or demand has occurred, no?Oil prices are down almost 50%, but demand is only down 5% YOY?
Oil is not traded by robots, it's traded by humans, who are subject to emotions and market manias. In recent years oil got way overpriced in market bubble, just as houses did in recent years and stocks did in the late 1990s.





The reason oil has fallen so much in the past 3 months is that it was grossly overpriced -- with everyone yapping about Peak Oil and saying ';The era of cheap oil is over, gas will never be below $3 again...';. But that bubble has popped, or is popping. That kind of market speculation and mania far outweighs the supply/demand fundamentals, at least it has in recent years with oil.





Oil prices are down almost 50%, but demand is only down 5% YOY?
It is called greed. The price at the pump changes hourly your local station calls a service and they suggest a going price up or down the use of oil is not all gas it is into thousand of other items. An Americans can not stick together long enough to change the tide. Demand does answer your question in several Countries that have little wealth and few cars the gas prices are down around 50cents a gallon. But where you have money there is no control on the greed of the big Oil Companies. Exxon was fined 500 Billion dollars for the accident in Alaska 15+ years ago the supreme court just ruled that was to much and lowered it to 50 million and last year they made 47billion clear profits. You have a budget not them right.
As because the subsidy rate and the loss to that effect to the government fund is too high.Hence the price is expected to raise further as the loss to the government will be borne by the customer in the future to come.