Additionally, many speculators reversed their positions on oil from short to long, and that can also pull prices higher.

"Prospects for equity markets and the global economy, backed up by exchange rate fluctuations, expectations about future oil market tightness, and, by inference, a shift of money into or out of futures markets can all influence short-term prices," the International Energy Agency (IEA) said in its June Oil Market Report. "Indeed, it is tempting to conclude that the shift in [New York Mercantile Exchange] WTI noncommercial positions from a net 11,000 short in early May to 40,000 net long a month later is sufficient explanation for the surge in prices" of more than 20% during May and into early June.

On top of that, some $3.8 billion has flowed into oil-and-gas exchange traded funds (ETFs) this year, compared with $1.4 billion in the first half of 2008, Goran Trapp, head of global oil trading at Morgan Stanley, told BusinessWeek.

"Considering that supply seems ample and demand is weak, the fact that oil is going up looks kind of weird," Adam Sieminski, chief energy economist at Deutsche Bank AG (NYSE: DB), told CNN. "But those factors are being overwhelmed by a huge sigh of relief that we’re not going to have the Great Depression. A lot of money is coming out of mattresses."

But while investors’ perceptions of the economic recovery – and, by extension, the oil market – have changed, the underlying supply and demand fundamentals have not. There is still a glut of oil on the market and not enough demand to soak it up.

Investors seemed to undergo a min-epiphany of that reality on Thursday, when disappointing jobless numbers raised concern "about the strength and timing of a recovery," James Williams, an economist at energy-research firm WTRG Economics, told MarketWatch.com.

August crude futures dropped $2.58 a barrel, or 3.7%, to settle at $66.73, the lowest closing level for a front-month contract since June 3, MarketWatch said.

That development supports the conclusions put forth in some recent research.

In its five-year forecast for the worldwide oil market, the IEA last week cut its five-year forecast for global crude demand and predicted that consumption won’t rebound to last year’s levels until 2012 – at the earliest.

"The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand," the IEA said in its Medium-Term Oil Market Report. "This marks a break after several years of strong oil demand growth."

The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels per day (bpd). According to the agency, world oil demand would grow at an average annual rate of 0.6%, or 540,000 bpd, annually over the 2008 to 2014 period, reaching 89 million barrels a day by 2014.

Those estimates are based on the International Monetary Fund (IMF) forecast for global economic growth of about 5% a year between 2012 and 2014.