"What the market will pay IS the demand."
Then the actual supply doesn't really matter, does it?
Yes it does. At $75 per barrel for oil, there is supply that will not be produced at $10 a barrel.
Just keep in mind that supply and demand are not fixed curves. New technology like horizontal drilling, supply curve shifts. New development in India and China that consumes more barrels, demand curve shifts. New EPA regulations that causes rework in the refineries, supply curve shifts the other way.