Oil smoke

Here's an instance of people continuing to perpetuate the myth that oil companies set the price for oil:

Sen. Hillary Rodham Clinton of New York, expressed concern about fuel costs during a visit with two families in Pomeroy, Ohio. “We need to give more authority to the government to go after these oil companies to ask the hard questions,” she said.

LA Times, 29 February 2008

It's the market that sets the price for oil, with its retinue of spot traders, long-term supply traders, futures speculators, refiners, dealers and what have you. They buy and sell amongst themselves at prices they set with each other. The oil companies just provide the oil as best they can. Or something like that. (Why do I feel like I've just said something dumb?)

All petroleum-based fuel is derived from crude oil. Oil companies can tamper with the market for crude oil by making that product more abundant and cheap in the short term -- but that's really no way to run a business, and it doesn't really solve the problem in the long run anyway. Hence why OPEC members will not increase output to stem rising oil prices. Digging for oil has become hard, expensive work, especially when there seems to be less and less of it in the ground, resulting in oil companies having to get increasingly more creative about how to extract that oil and having to bear more risk than usual (say, by going into war zones to get their hands on the stuff).

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Where does the falling dollar fit into this picture?

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I'm not really sure where this is going. I'm basically just confused. To make matters worse, I can never get a straight answer from people about anything anymore.

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A couple of things need clearing up:
- The phrase "oil company" conjures up ExxonMobil, BP, Shell and the like. Is this what Hillary means by "oil company"?
- Fuel costs do eventually rise as a result of higher crude prices, but other factors could also be the cause of such a rise, and not necessarily to do with oil companies as such.