Oil prices rise on supply worries
China's global hunt for oil
What does $60 a barrel mean to you?
Why are oil prices so high?
World oil demand estimate raised
This educates me a little. There's more to the oil business than oil. Oil is like networking: the least badwidth sets your pace. In oil's case, a supply problem anywhere in the chain can result in a supply problem at the pump. For instance, when refineries are running at max capacity, when one fails, shortages start and prices rise. One has the exact condition of peak oil, except at a smaller scale.
Likewise, with tighter supply, refineries will cut out the least profitable fuel and focus on the most profitable fuel. We see them making more money. They see themselves unable to refine full time, and possibly losing money due to idle capacity, so they cut out the least profitable stuff.
Weather and speculation play factors as well. Local laws and regulations.