Since it's been brought up repeatedly, here is an article (with limited explanation) on most of the causes for CA's high gas prices
The first sentence is an error--this person has a Phd and doesn't know that Hawaii is part of the United States or that it has higher gas prices than California? I don't think so, but it certainly adds to the emotional impact when they leave the facts out, doesn't it? Why did they do that? What is their motive for lying to their readers?
I don't understand why people are upset over the oil companies making money. Is their some evidence of price fixing or a conspiracy? No? What's wrong with some companies making money?
So refineries are the one primary cause behind the cause and this article lists the other
So an industry making money is one cause, and the other is speculation. Hmmph. The function of the speculators in the market is to provide liquidity for and assume risk from the commercials. I've seen this argument before--that speculators cause the price to be unaturally high--and it may be true, but since we have no data for oil markets confined to commercials we can't know this.
If I'm in the oil business and people who are not in the oil business are dumb enough to gamble in my market
An elegant rephrasing of the axiom 'a man makes his money in his own business and loses it it another' , which refers to speculation.
Since oil is sorta an inelastic market, in the sense that demand doesn't drop, supply and demand doesn't always account for the price. I've spent time reading through OPEC's stuff, and I'm not sure about their methodology, but it could go something like this:
an IMF paper stated that for every permanent $5 increase for a barrel of oil, the world GDP slows by 1/4 of a percent. Looking at the curve, there must be an optimal point--like a second order deriveative--as too high a price will effect economies and oil producers will eventually suffer. But OPEC doesn't control the market.
The price of oil is whatever the market will bear.