Energy

Gas Prices Redux

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The Cincinnati Enquirer looks hard at high gas prices in the heartland and concludes with these soothing words from an industry spokesman:

John Felmy, chief economist for industry group the American Petroleum Institute, recently testified before Congress that a review of market fundamentals shows prices are driven by tight supply.

"There is a fragile balance between the world's supply and demand for crude oil," he said, noting the world market, not oil companies, sets the price for a barrel of crude oil, which cost $62.46 at Monday's close on the Nymex. He said U.S. gasoline production is at an all-time high despite some refinery interruptions that have been blamed for price spikes.

Felmy defended the oil industry against accusations it's not doing its best to keep a lid on prices.

"Some are again accusing the industry of illegal activity," he continued. "Our industry has been repeatedly investigated over many decades by the Federal Trade Commission and state attorneys general. Of the more than 30 investigations that we are aware of, all have resulted in exoneration."

More here.

Reason's Ron Bailey gives some more context here.