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UPDATE 1-US Congress grills oil execs on record pump prices

Wed May 21, 2008 4:37pm EDT
 
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(Adds hearing details, new throughout)

By Chris Baltimore

WASHINGTON, May 21 (Reuters) - Executives from the five biggest international oil companies on Wednesday claimed that they were victims of high oil prices along with U.S. consumers, but U.S. Senate lawmakers showed little sympathy.

For the second time this year, executives from Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz), Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz) and three other big energy companies were called to testify before Congress to explain their swelling profits as gasoline prices hit a record average of $3.79 a gallon.

Executives testifying under oath before the Senate Judiciary Committee reiterated the corporate stand that crude oil markets -- not profiteering at the gasoline pump -- is the prime reason behind high prices.

"As repetitive and uninteresting as it may sound, the fundamental laws of supply and demand are at work," said John Hofmeister, president of Shell Oil Company, the U.S. subsidiary of Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz).

Prime drilling acreage in Alaska and the Outer Continental Shelf off the U.S. coast are off-limits and international oil companies are at a growing disadvantage to government-owned companies like Saudi Aramco and Venezuela's PDVSA, executives said.

Exxon Mobil, the No. 1 U.S. oil company, makes about 4 cents on every gallon of gasoline it sells in the United states, down from 10 cents a gallon in 2007, due mainly to higher oil costs, said Senior Vice President Stephen Simon.

Lawmakers appeared leery and sometimes downright hostile to executives' testimony that crude oil prices - which comprise about 70 percent of gasoline prices - are the primary reason for soaring gasoline prices.  Continued...

 

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