An insidious form of manipulation of oil prices

An insidious form of manipulation of oil prices

I have written a number of articles on how pump prices of oil are being kept high. Let me summarize the main reasons:

First, there is a monopoly of oil. The big oil companies – Exxon Mobil, Royal Dutch Shell, BP, then Chevron Texaco in fourth, which is followed by the relatively smaller oil companies such as Total– are vertically integrated. They control the production and distribution of oil and natural gas: from exploration, extraction, refining, distribution to your friendly gasoline station. Since they control the supply, they control the prices.

The days when the Organization of Petroleum Exporting Countries was able to control the production and price of oil, such as in the 1970s, are long gone. Remember that in 2008, during the peak of spikes in oil prices, announcements by OPEC of increases in the production of oil did not temper prices.

There are those who claim that because the production and sale of oil and gas are not being controlled by only one company, there could be no monopoly pricing. They are, after all, in competition with each other and competition lowers prices. This is the same argument of the Philippine government in justifying the continued implementation of the Downstream Oil Industry Deregulation Law. While it is true that giant oil companies compete against each other, they act as one in setting prices. One could readily observe that oil companies always announce that they are raising the pump prices of oil one after another..... MORE
Source:  Bulatlat.com

URL: http://bulatlat.com/main/2012/03/14/an-insidious-form-of-manipulation-of-oil-prices/