We are not looking at pure hands off capitalism at work here, if we were, many new refineries would have been built in the last 30 years. This has warped the supply and demand situation. The supply is tight because of reaching the limits of US refining capacity - in true hands off capitalism this would result in new refineries being built.
The real question in my mind is why are no new refineries being built to average out the sharp variations in the supply situation?
This is a separate problem from the warped crude supply and demand situation.
Neither situation is a good example of true hands off capitalism.
Perhaps because of Dubya's obsession with diverting capital investment to China.
In turn, the increased Chinese demand for oil helps keep our gas prices propped up.
Snow's Beijing Cave-In Leaves China Policy Critics No Choice But to Fight White House
The real question in my mind is why are no new refineries being built to average out the sharp variations in the supply situation?
This is a separate problem from the warped crude supply and demand situation. Neither situation is a good example of true hands off capitalism.
Bing! Bing! Bing! We have a winner!