Lawmakers on Capitol Hill grilled executives of the nation's five largest oil companies Wednesday, saying that the high oil prices cannot simply be a result of supply and demand balances.
The oil executives appeared before the Senate Judiciary Committee to defend their companies in the face of rising fuel costs.
Senators argued that the oil industry's concentration, along with OPEC price collusion, is a major factor in high gas prices. The hearing came on the same day that oil prices surged to $132 per barrel, even as government reports show supplies of oil and gasoline fell last week.
Almost overnight the average price of a gallon of regular gasoline rose to $3.80.
Committee Chairman Patrick Leahy, D-Vt., said there's an unexplained "disconnect" between prices - and legitimate supply and demand.
"We need to get prices under control. We can only conclude that the oil markets have failed," Sen. Herbert Kohl, D-Wis., said.
But Shell Oil Co. Chairman John Hofmeister responded that the high prices are the simple result of the current market.
"The fundamental laws of supply and demand are at work," he told the committee.
With gas and oil prices setting new records on almost a daily basis, some analysts are beginning to wonder if anything can stop the runaway prices.
Some say the price of crude may have already risen to high. However, with the ever-growing demand for oil in developing nations and supply problems of oil rich nations, more record prices may continue.
Source: The Associated Press