(May 11, 2006)—Red Cavaney, the president of the American Petroleum Institute, told a U.S. House Committee Thursday that high gasoline prices are the result of demand that outruns supplies.

Cavaney told the committee prices could be reined in if the government were to relax rules to allow refineries to produce more gasoline.

Oil companies, he said, don’t set the price of crude oil and crude oil prices have contributed to 85 percent of the change in gasoline prices.

Demand for oil is increasing at a time when worldwide production capacity is diminished, he said.

Meanwhile crude oil futures prices ended higher Thursday on the New York Mercantile Exchange.

The near-month contract for the benchmark grade rose $1.19 to $73.32 a barrel.

Worries about supply disruptions intensified after police said gunmen in Nigeria kidnapped at least two foreign oil workers from a bus in a second day of attacks targeting overseas workers.

Concerns about Iran, a major oil exporter, also continue to support prices.

The geopolitical worries have overshadowed the weekly petroleum report from the United States, showing that crude oil and gasoline inventories rose last week.

Pump prices around the state are down slightly this week, according to TexasGasPrices.com, which says prices Thursday ranged from $2.47 a gallon at a station in Edinburg to $2.99 at a station in College Station.

Overall, Texas motorists are paying about 75 cents more a gallon than they were at the same time last year.

Click Here For TexasGasPrices.Com Web Site

More News >>Sports >> Weather >>