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Give me a break on this collusion thing. The reason oil companies are shutting down their refineries in California are due to environmental regulations that force them to upgrade the plants to make them cleaner. In some cases, the profits of refining the oil there don't justify major overhauls of the refineries, so they are shut down. Oil prices in the 1970s were approaching $30/barrel back then. With inflation thrown in, the price of oil is way below what it was back then.
I have been working in this industry for 14 years, and the only time we have tried to "manipulate" prices is when the prices drop so low that it costs us more to produce than we can lift it out of the ground for. Oil companies (just like any other publicly traded company) are held accountable by the stock market, and if revenue were to suddenly dry up due to shutting wells in, the stock price would react accordingly.
The oil price is governed by simple supply and demand. It is also a very complex system since the oil reserves are reported differently by every country, and it is hard to get a consistent picture of what is on the market at any one time.
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