Crude oil prices have cooled off considerably in recent months. WTI, the primary U.S. benchmark oil price, was recently around $75 a barrel. That's a dramatic decrease from its peak of over $120 a barrel earlier this summer. The primary culprit is the concern that the global economy is in or barreling toward a recession, which would sap oil demand.

However, even with a recession, crude prices could rally sharply, fueling a rebound in oil stocks. That's because the oil industry's spare capacity is running low. If a major supply issue arises from a natural disaster or terrorist attack, the industry could struggle to meet demand, likely sending crude prices soaring. 

The oil industry always runs at a delicate balance between supply and demand. If industry fundamentals get out of balance, prices can make big moves. Governments try to keep some spare capacity to provide the market with oil if there's a supply issue, to keep prices from spiking.

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Source Fool.com