For example, extended periods of high oil prices lead to consumers shunning vehicles that are not fuel efficient, thus reducing their driving. Businesses and individuals may pay more attention to conserving energy due to its cost. These factors reduce demand.
On the supply side, high oil prices lead to more drilling projects; more research money pours in and sparks innovation in new techniques and efficiencies; and many projects that were not viable at lower prices become viable. All of these activities increase supply.
An example of this circumstance was seen between 2007 and 2014 when oil prices were above $100 for the most part. Massive investments poured into the sector via credit and new companies. Production increased in response to high prices, especially with innovations in fracking and oil sands. These investments could only be justified based on high oil prices and contributed to record supply in 2014.