Responsible Journalism on Oil

The AP, of all people, had an article over the weekend that dispelled the notion that evil US oil companies are responsible for high prices:

The knee-jerk villains in all this are the oil companies, fat with multibillion-dollar profits, frequent targets of populist anger. But wait: The oil companies don't set the price of oil or the cost of a gallon of gasoline.

Prices are a function of the open market, the result of futures contracts being traded on the New York Mercantile Exchange, or Nymex, and other exchanges around the world.

As the article states, "[t]he biggest factor in the skyrocketing price of gasoline is the historic ascent of crude oil."

Oil prices often fluctuate with production decisions from the Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world's crude, or when conflict in the Middle East or Nigeria threatens supplies.

As for the oil companies' "windfall profits" that Democrats want to tax, despite the fact that that will only increase gas prices:

In any case, huge profits at big oil companies like Chevron and Exxon Mobil aren't because of high prices at the pump. Their enormous profits are tied to their exploration and production arms, which are benefiting from record crude prices.

Go ahead and read the whole article. It discusses the steps in gasoline production, how much each step adds to the cost of a gallon of that sweet unleaded, and how gas stations set prices.