Oil exec: Prices driven by 'fundamentals'(congress still ignoring the need for domestic supplies)

CNN ^ | 5/21/2008 | Steve Hargreaves

[tobyhill]

NEW YORK (CNNMoney.com) -- Amid increasing public outcry over record-shattering oil and gas prices, senators hauled company executives in to testify Wednesday to ask what's behind the recent runup.

The Senate Judiciary Committee called the hearing to explore the skyrocketing price of oil, which topped $130 a barrel earlier in the day. The committee is set to question executives from Exxon Mobil (XOM, Fortune 500), ConocoPhillips (COP, Fortune 500), Shell Oil Co. (RDSA), Chevron (CVX, Fortune 500) and BP (BP).

"Normal supply and demand says prices should be around $55 to $60 a barrel," said Sen. Patrick Leahy, D-Vt., chairman of the committee. "Prices should not skyrocket like this in a properly functioning, competitive market."

Before the hearing even began, a heckler in the crowd shouted: "Stop ripping off the American public - bring these oil prices down."

But a top executive from BP said the high prices are being driven by global forces.

"We cannot change the world market," said Robert Malone, chairman and president of BP America Inc. "Today's high prices are linked to the failure both here and abroad to increase supplies, renewables and conservation."

[kellynla]

the people who should be looking out for Americans are Congress & Bush...
but as you know they have done absolutely NOTHING to enable more drilling, more refining and more construction of nuclear power plants...your outrage is directed to the wrong people!

[Anonymous Rex]

And none of those mutual funds are returning to me in appreciation or dividends what I’m losing in fuel expenses, increased costs of food, increased costs of goods, etc. Nor are they returning an equal amount to the economy.

LMAO (sarcasm)

I’d rather not make as much in my mutual funds and have the economy be whole. Then again, I’m motivated by things other than greed.

[Anonymous Rex]

My outrage is directed at those who are profiting the most, last time I checked it wasn’t congress and bush it was those posting record profits every quarter.

[kellynla]

“We aren’t talking about fossil fuels, we’re talking about oil”

Excuse me, but oil is a fossil fuel.

[Anonymous Rex]

Yeah, I’m aware, the discussion is just about oil. Not oil, coal, etc.

[kellynla]

you think oil isn’t a fossil fuel...

where do you get all this misinformation?

“posting record profits?”

“record profits?”
you call less than 10% record profits?

It would take me the rest of the day to correct all the

mistakes you have made on just this one thread...

but you can start reading here.

Energy Kid’s Page
Petroleum(Oil) — A Fossil Fuel

http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/oil.html

Good day

[Anonymous Rex]

I’m well aware that oil is a fossil fuel, my point is that it’s just ONE of the fossil fuels.

Using statistics that encompass ALL the fossil fuel figures when we’re only discussing ONE of them, oil, is worthless.

The figures you posted include oil, coal, natural gas, etc. and as a result are worthless in a discussion that is focused on only oil.

As for correcting my “mistakes”, are you even reading the financial publications surrounding the big oil companies? Are you even aware that nearly every quarter they are posting record profits?

[schu]

Sample of financial results:

Chevron
Net Profit Margin 8.02%
Return on Equity 25.41%

Exxon/Mobile
Net Profit Margin 9.72%
Return on Equity 35.59%

Microsoft
Net Profit Margin 28.33%
Return on Equity 45.28%

Oracle
Net Profit Margin 24.20%
Return on Equity 27.79%

Proctor & Gamble
Net Profit Margin 13.90%
Return on Equity 16.93%

Source: MSN Financial

Not sure what you are angry about or why. Oil companies financial performance is nothing that great compared to other successful US companies. Furthermore, all companies charge replacement value for products they sell, to do otherwise is foolish.

Yes, maybe the big guys are messing with the market/futures. Good luck catching them, and if you do so what? It seems the solution is to increase US based supplies of energy and simplify our markets. The problem is not Exxon-Mobile, the problem is the US Congress and the fascist environmental lobby.

schu

[dmanLA]

“As for correcting my “mistakes”, are you even reading the financial publications surrounding the big oil companies? Are you even aware that nearly every quarter they are posting record profits?”

Roughly 7% profit for oil companies vs. 15% profit for Apple. Who’s making record profits?

What you don’t seem to understand is that oil companies are HUGE. 7% of a huge number is a huge number! You need to normalize the numbers to do any real comparisons.

[boogerbear]

And what? What if they don’t have anything funny going on? There’s nothing illegal about being a speculator on the commodities market. Or should we just use the IRS as a weapon on them a la Nixon and Clinton? Just make their lives miserable until oil costs what we want it to, where should we draw the line? $60 a barrel? $40? How about $10? That’ll really learn em.

[kempo]

You have absolutely no idea what your talking about. “Record profits on the part of the big oil companies is not being generated solely on an increase in production”. Are you kidding. Production is DOWN in the U.S. We are having import 60% of our oil from other countries. When prduction is down (supplies)and demand is up,like it is world wide,the price goes up. Domestic oil companies have not been able to drill in new areas in the U.S. for over 30 years. The problem lies with our government. Most people have lead to believe that it is all a conspiracy by the “Big Oil”. Within the next few years even your local Joe Blow will know its all been the fault of the liberals in our government who are supported by the enviro-loonies.

[Anonymous Rex]

They are absolutely messing with the futures market and the last time I checked that sort of thing was punishable by prison time.

Which I hope they all get.

[aruanan]

Well, Congress is indirectly messing with the futures market in that it contributes to the high futures by preventing oil companies from developing our own resources. There would be fewer "concerns over supply" and, thus, a reason for higher futures, if U.S. companies were able to vigorously explore, identify, extract, and refine our own petroleum and gas. The single roadblock to all this is the U.S. Congress.

[Anonymous Rex]

I don’t need to normalize jack, if they’re making record profits then OBVIOUSLY their margins have suddenly become higher for some reason.

Comparing the oil companies to a computer company is comparing apples to oranges and you know it so stop already with the rediculous comparisons between completely unrelated industries.

[Anonymous Rex]

Not only make their lives miserable but jail them. We are at war and their greed is killing not only our economy but others as well.

Oil is a neccessity to nearly all economies, it can no longer be allowed to be manipulated by greedy speculators.

[Anonymous Rex]

Based on your response I think you’re mistaken about who has no idea what they’re talking about.

[aruanan]

As the largest single consumer of oil in the world I’m suggesting that we put our boot heels on the throats of the bastards that are artificially inflating the prices and keep them there until they submit or suffocate.

Please, it's embarrassing to see someone make such a fool of himself in public, though it is entertaining to see many others answer your populist hysteria with actual facts.

[Anonymous Rex]

Is it now, and just what facts might those be? So far I haven’t seen a single “fact” that disproves my contention that speculators (many of whom are controlled by big oil) are causing this problem.

The big oil execs themselves admitted yesterday that they are doing what’s best for their shareholders. What does that sound like to you?

The price of gas more than doubles in just a few years and the majority of you yahoo’s just lap up out of the bowl what the big oil companies are putting down for you to drink.

It’s pathetic.

[Anonymous Rex]

Read em’ and weep, articles from as recently as this week and as far back as 2005.

http://www.latimes.com/news/opinion/la-oe-roberts10dec10,0,7648253.story?coll=la-opinion-rightrail

http://www.jubileeinitiative.org/RiggedOil.html

http://www.niemanwatchdog.org/index.cfm?fuseaction=background.view&backgroundid=00100

http://www.nypost.com/seven/06212007/business/oil_speculators_secret_business_john_crudele.htm

http://money.cnn.com/2008/05/20/news/economy/senate_commodities/index.htm?postversion=2008052010

http://www.gasandoil.com/goc/features/fex53581.htm

[aruanan]

The big oil execs themselves admitted yesterday that they are doing what’s best for their shareholders. What does that sound like to you?

Microsoft has a bigger profit as percentage of revenue than so-called "big oil". Big oil profit out of every dollar of revenue is lower than industry standard and less than half that of tobacco and pharmaceuticals. And it's unbelievably lower than government at any level.