Thus the many bullish oil investors who still expect prices to rebound quickly to their pre-slump trading range are likely to be disappointed. The best that oil bulls can hope for is that a new, and substantially lower, trading range may be established as the multi-year battles over Middle East dominance and oil-market share play out.

The key question is whether the present price of around $55 a barrel will prove closer to the floor or the ceiling of this new range. The history of inflation-adjusted oil prices, deflated by the United States Consumer Price Index, offers some intriguing hints. The 40-year period since OPEC first flexed its muscles in 1974 can be divided into three distinct periods. From 1974 to 1985, West Texas intermediate, the American benchmark, fluctuated between $48 and $120 a barrel in today’s money. From 1986 to 2004, the price ranged from $21 to $48 (apart from two brief aberrations during the 1998 Russian crisis and the 1991 Iraq war). And from 2005 until this year, oil has again traded in its 1974-to-1985 range of roughly $50 to $120, apart from two very brief spikes in the 2008-9 financial crisis.

What makes these three periods significant is that the trading range of the past 10 years was very similar to that in the first decade of OPEC domination, from 1974 to 1985, but the 19 years from 1986 to 2004 represented a totally different regime. It seems plausible that the difference between these two regimes can be explained by the breakdown of OPEC power in 1985 and the shift from near-monopolistic to competitive pricing for the next 20 years, followed by the restoration of monopolistic pricing in 2005 as OPEC took advantage of surging Chinese demand.

In view of this history, the demarcation line between the monopolistic and competitive pricing at a little below $50 a barrel seems a reasonable estimate of where one boundary of the new long-term trading range might end up. But will $50 be a floor or a ceiling for the oil price in the years ahead?

There are several reasons to expect a new trading range of as low as $20 to $50, as in the period from 1986 to 2004. Technological and environmental pressures are reducing long-term oil demand and threatening to turn much of the high-cost oil produced outside the Middle East into a “stranded asset” similar to the earth’s vast unwanted coal reserves, as described in this column of two weeks ago. Additional pressures for low oil prices in the long term include the possible lifting of sanctions on Iran and Russia and the ending of civil wars in Iraq and Libya, which between them would release additional oil reserves bigger than Saudi Arabia’s onto the world markets.