There is a huge difference between oil supply and the amount of oil in the ground.
You have oil in the ground and demand for oil products What determines pricing is how much oil is being refined (from ground to the customers). It is the refinery that controls inventory. So when faced with a weak demand they reduce the flow such that there is little supply.
Over the past six months the oil industry as a group reduced their production levels to the lowest level in over 40 years. It was the only way they could keep oil prices up. As a result, “oil supply” is low and refineries are working at less than capacity.
As the economy improves you can expect that oil pricing will go up. It is the goal of oil companies, like any other company, to make money. So if they believe the Market can handle a higher price they will raise it. (it is called elasticity of demand)
They have a scarce resource and it is in their best interest to sell small amounts of oil but make the same or more money. So they monitor economic trends. Keep in mind that even though the Economy sucked last year, Exxon-Mobile made $53 Million a day in profits. That was down from the $45 Billion they made in 2008 but still not a bad profit margin
As a final note:
Unless you enact a law saying that all oil pumped out of the US can only be sold in the US then it doesn’t matter how much oil we produce. Oil companies will continue to sell Oil to the highest bidder… Where do you think Japan, China and others get their oil from… yep, oil being pumped from here in the US goes abroad. Do you really think that oil companies are going to sell oil here in the US for $40 a barrel when they can sell it to China for $80.