Producers Set To Reap Windfalls by Adam Porter

Against the forecasts of many analysts, oil prices are once again touching $50
a barrel. The main reason given for this current rise is a cold snap in the
United States.

But as we have seen before, that mass media version of reality may be not so real after all.

First, the lack of refining capacity in the US is not a matter of luck. It has been a matter of choice for US refiners for some time.

“If the US petroleum industry doesn’t reduce its refining capacity, it will never see any substantial increase in refinery margins,” an internal Chevron document in November 1995 reported by the Associated Press said.

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From al jazerra by Adam Porter.
http://english.aljazeera.net/NR/exeres/FC714ECB-4937-4683-BF8E-B23CBB21ABD0.htm

In 1996 a leaked memo from Texaco marked “highly confidential” said excess capacity was “the most critical factor” facing the US refining industry. This excess capacity was producing “very poor refining financial results”.