Posted on 10/28/2005 1:38:17 AM PDT by Crackingham
Exxon Mobil, the world's largest oil company, said yesterday that its third-quarter net income jumped 75 percent, to $9.92 billion. Its profit in the first nine months of this year - $25.42 billion - already equals its full-year earnings for 2004. This year's sales, which topped $100 billion in the last quarter, are expected to exceed those of Wal-Mart.
Another oil giant, Royal Dutch Shell, reported a 68 percent jump in profits yesterday, to $9.03 billion. Chevron is expected to post a profit of more than $4 billion today.
This year is shaping up as an exceptionally lucrative one for the oil industry, thanks to strong global demand, tight supplies and high prices for oil and natural gas. While the idea that the Bush administration was considering imposing a windfall profits tax was knocked down yesterday by officials, longstanding resentments against Big Oil are resurfacing and could end up imposing some additional burdens on the industry.
SNIP
Today, Republicans and Democrats alike, aware of the politically sensitive issue of high energy prices, are putting increasing pressure on the oil and gas industry to return some of its profits. The ideas include forcing the industry to invest in more refining capacity or to increase inventories to cushion energy shocks.
SNIP
Senator Bill Frist, the Republican leader, said yesterday that executives of major oil companies will be summoned to Capitol Hill to testify about high energy prices. Some of Mr. Frist's language harked back to the 1970's and early 1980's when cries of price gouging at gasoline pumps were common.
"If there are those who abuse the free enterprise system to advantage themselves and their businesses at the expense of all Americans," he said, "they ought to be exposed, and they ought to be ashamed."
(Excerpt) Read more at nytimes.com ...
Right you are..bravo!
The price of oil reflects the bizarre OPEC monopoly control..., "perception" of availability, and the resulting futures market....
Production has been down....it's in all the papers...therefore, expenses are down.....no investment in refining....limited investment in drilling new holes... The "boogieman" is not the oil companies....it's simple supply & demand and all government meddling....
Scapegoating is easy, the dimwitted will always fall in line behind the emotional finger pointers....
Which brings to mind, who destroyed the steel industry in America?
There is heavy demand for widgets and the market is willing to buy them at $10.00. Your cost goes up to $5.00 and you maintain your markup. You make $5.00 a widget.
Increased production doesn't always in increase manufacturering costs, many times it lowers them, thus increasing profits. But what you senario leaves out is competition. This is what is missing in much of today's so called capitalism. In true hands off capitalism it is not just supply vs demand but also *competition* that limits profit - high profit should invite competition. In the "Big Oil" big profit senario this would mean a competitor would built a refinery resulting in the added supply smoothing out supply crunches and the retail price. But that isn't happening is it?
Perhaps because of Dubya's obsession with diverting capital investment to China.
In turn, the increased Chinese demand for oil helps keep our gas prices propped up.
Snow's Beijing Cave-In Leaves China Policy Critics No Choice But to Fight White House
good for them...this is why I am and will always be an investor in enery stocks.....
Hmmm...enery? I'm enery the 8th I am....enery the 8th I am I am...well not really...just need to spell check...ENERGY!
Exxon led the price decreases in my area. Undercut everyone including the indpendents.
When Woolworths 5&10 Cents stores took off around 1900 in most major cities, there were Wal-Mart like attacks about "Big Buisness" killing small shops. And so it goes..
Google ANWR and find it on the map. The area in question is right next door.
How much of the year is the deep water open around there?
Or are you going to haul natural gas across Alaska, from north to south on trucks?
The price went up, people cut their usage, there was a supply, supply and demand worked, so where is the beef?
The products from the largest refinery complex (in the Virgin Islands)in the hemisphere have to be brought in by tanker. The offshore unloading facilities were shut down for the hurricanes. This equipment does not run itself. People operate it, maintain it, and keep things from self-destructing. How much would you want to make to sit our a cat 4 or 5 hurricane on a platform somewhere offshore? If you have any sense, you realize no paycheck is worth anything if you are not around to cash it.
And as a reminder, the oil industry employs one heck of a lot of Americans, right here at home, where we produce about 45% of our petroleum needs, in spite of NIMBYs, and ECOWHACKOS, and the US Government.
Few industries are as good at getting the job done, whatever it takes, but it will cost money. It is a business, not a charity.
Before you go pushing for the Government to 'get involved' just think of the wonders it has already done for health care and the potential that exists along those lines, then think about thaving that in your gas tank.
And, once and for all, somebody please tell me how another DAMN TAX is going to make fuel any cheaper?
Byron Dorgan should KNOW BETTER, it was a "windfall profits tax" that crashed the oil industry in North Dakota four years before the rest of the industry went down the tubes in 1986. It cost the state a fortune in lost revenues, and one hell of a lot of people their jobs, houses, often marriages, and all they were making payments on when the bottom dropped out. Now he wants to impose this on a National level.
How will this benefit America? Not at all.
The problem is that once a business gets so big or powerful, they have the ability to rig the game so that free enterprise is not really that.
That is why there were laws against restraint of free trade etc.
If the price of their raw material goes up then typically their profits should go down, at least for the short term. Instead they went way up.
No doubt they were gouging.
Competition is as much a part of true hands off capitalism as supply and demand.
That's my gripe, it isn't true capitalism anymore if, for various reasons, there is no hope of competition.
No problems with companies making profits but why is it that oil companies seem to be the only business that when threatened by natural or man made disasters to their commodity make enormous profits in the wake?
Why aren't they reinvesting some of their billions in new research like drug companies do? Why aren't they using those dollars to vigorously fight off the envirowhackos so they can build new refineries? Their pockets are obviously deeper with billions in profit, they should be able to squash the greenies like the stink bugs that they are.
I pay the price, but I don't like the effect the speculators have/had on the market. I'm a capitalist and believe in the freemarket system as well, just feel there are some areas of improvement that can be made to help keep the supply of gas even with demand, not short, not long. I'm all for keeping oil company profits at a reasonable rate and providing affordable fuel for the masses. And no, I'm not talking about price controls or forced production.
For all the true capitalists out there, spare me, I know about supply and demand, yadda yadda, etc, etc. I'm just posting some questions for thought.
Cheers!
What seems out of line to me is EOM's profit increasing by 75%. This profit is clearly larger than what would be derived from merely passing along the increased cost of their crude oil. It would appear that they were already making a healthy profit on their products.
It is interesting the article's comparison of EOM's profit to that of Wal-Mart. Wal-Mart became the biggest by moving their product to the consumer at the lowest possible price, EOM and the other oil giants did so, by doing just the opposite.
It is capitalism, and legal to do so, and no doubt you will say that on this matter I am out of line. Without a doubt their profits will go down after their high prices have slowed the economy and demand for their product. So all things equal out in the end. I just hope that my business which is suffering from their high profits, (we ship primarily by truck), will still be around to take advantage of those lower prices when they come. And no, I don't make buggy whips.
I don't think that a whopping 10% profit margin is too terribly heinous.
Byron Dorgan, "NIMBYs, and ECOWHACKOS, and the US Government" are not capitalists, ND's energy tax is not an environment of true hands off capitalism, yet evil "capitalism" gets the rap.
The refineries in this country are 'governed' by OSHA's Process Safety Management standard. (PSM) CFR 49 1910.119. Even Cheney calling BP for a favor would do no good. Their maintenance activities must be strictly adhered to.
PSM is the most comprehensive piece of legislation ever handed down by OSHA. It took the industry years to get in full compliance.
Just the fines alone....
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