With crude prices having dropped at least 20% from their record highs earlier this year, the first silly predictions about how much more they can fall are beginning to gush forth. You won't be surprised to know that some of the prognosticators have thrown caution -- and reality -- to the wind in arriving at their conclusions.

For instance, I recently read a column in which the author predicted that black gold would fall -- "plummet" is probably a more appropriate verb here -- not to $100 a barrel, nor to $70, but to somewhere in the $30 - $50 range. You won't be surprised to lean that the logic employed to arrive at that target was straight from left field.

Elasticity stretch
For starters, most of the rather absurd forecasts overdo the recent decline in U.S. gasoline usage, the assumption being that the slippage will continue to the point where we'll be using a tiny fraction of prior amounts. Admittedly, Americans are driving less and thereby using less gasoline these days, but before long we'll be bumping up against the economic concept of "elasticity of demand."

It's easy to assume an extension of initial drops in fuel use, which have occurred as drivers have focused on shorter routes to work, working from home more frequently, and otherwise reduced their miles driven. The trouble there is that the declines tend to be wrung out of the system early on, and our reduction in usage will almost certainly plateau before long.

And then there's the issue of geography. Those who look at slipping U.S. gasoline consumption tend to ignore the reality that, while we Americans can "adjust" our gasoline consumption significantly, unless China and India’s growing demand for petroleum follows suit, demand for oil isn’t going anywhere.

Start your engines
And then there's the all important issue of changes in automotive engine technology that has a number of observers in a lather. Let's start with hydrogen. Essentially all the automakers, including Ford (NYSE:F), General Motors (NYSE:GM), and Honda (NYSE:HMC) are working feverishly to perfect hydrogen fuel cell cars. The difficulty here is that the widespread proliferation of hydrogen, of the type that'll meaningfully reduce gasoline demand, is years off. Such a dramatic shift in our nation’s infrastructure – (Pop quiz: where is your nearest hydrogen refueling station?) – can’t happen overnight.

So then we move to hybrids. When you say you have a hybrid, the world assumes you're getting all sorts of elevated mileage. Trouble is, all hybrids aren't created equal. For example, while Toyota's (NYSE:TM) Prius and Honda's Civic hybrid both are capable of going more than 40 miles on a single gallon of gas, GM's Malibu hybrid nor its Saturn VUE hybrid attains much more fuel efficiency that my standard-engine Toyota.

Plug-in promises
Beyond that, there's the plug-in, to which most of my hopes are pinned for real gas savings. But while we'll probably begin seeing more and more plug-ins coming at us on our nation's roads as the years pass, real progress, as measured in millions of working plug-ins vehicles, is probably a decade or more away.

Finally there are the all-important geological and geophysical considerations that often are completely left out of crude price predictions. In this context, I remain convinced that it's unlikely that we'll be successful in ramping global crude production meaningfully above 85 to 90 million barrels a day. On the geological front, many of the world's biggest fields are becoming tired, and their yields are dropping steadily. We'll need to replace those declines before we can start to raise global production significantly.

Geopolitically, countries like Venezuela, Kazakhstan, and Russia have made life very difficult for Western oil companies like Total (NYSE:TOT) and BP (NYSE:BP) that have endeavored to work within their boundaries. And looking ahead, the elbows of many oil-producing states are likely to sharpen significantly as time passes.

So, while I believe that further slippage in oil prices is entirely possible, it's difficult to envision those prices far below triple digits before some unpredictable event quickly halts their slide. On that basis, Fools would be well advised to continue to keep close tabs on the energy portions of their investment portfolios.

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Fool contributor David Lee Smith doesn't own any of the companies mentioned above. He does, however, welcome your questions or comments. The Fool has a disclosure policy.