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I have no idea whether the oil companies have manipulated the markets. If they have, then they should be punished.
That said, the market explanations for the profits doesn't seem that out of line. Not that the executives are sympathetic figures, but as one of them said this morning, the profit margin is the same as the average of all U.S. industry, it is just that they are such a bloody huge industry.
The oil business is historically a low margin one and as another said, where were all the people in the mid-80s when the industry was losing money hand over fist? Oil production (and these are numbers I'm looking up so the math I do may be wrong) is around 85 million barrels a day.
Or 7.82 billion barrels a quarter. The top five oil companies reported a combined quarterly profit of $32.8 billion for the 92-day third quarter (per the San Jose Mercury-News article I just looked at. I don't know what the oil production market share for teh top five companies is but I feel somewhat confident in guessing that it is more than 80% and less than 100%, which means that at this range the profit per barrel would be somewhere between $4.19 and $5.24 per $60+ barrel.
That's just back-of-the-enevelope but doesn't seem horribly unreasonable to me, especially when both ends of the political spectrum have long espoused ideas that would argue that both prices and profits should surge in the short term.
But if they have been manipulating then nail them to the wall.
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