Cato Institute
by Alan Reynolds

11/09/05

If prices or crude oil and gasoline really rise and fall at the whim of U.S. petroleum companies, why would oil and gas prices ever fall? Texas crude fell to $12 in February 1999. Was that because U.S. oil companies suddenly became less greedy? 'Average U.S. gasoline price tumbles to $2.48 a gallon,' said a recent headline at USA Today, noting gas prices had dropped by at least 55 cents. The crude oil price dropped 9.8 percent in October. The Dow Jones stock index for oil and gas companies fell 9.2 percent. On the futures market, natural gas prices fell 18 percent in a single week. Mr. O'Reilly's spin zone had to spin a new theory. He now argues that, while prices rose due to some inexplicable hurricane of greed, they later fell because 'oil companies have been scared into lowering prices of oil'...

http://www.cato.org/pub_display.php?pub_id=5184


Informant: Thomas L. Knapp