Exxon makes record profits

[#juan]

I thought you all would be happy for Exxon Mobil since it was the artificially raised prices at the pumps after Katrina that pushed their profits over the top. Aren't these people wonderful?

Exxon Mobil makes record $36.13B US in 2005
Last Updated Mon, 30 Jan 2006 10:54:50 EST
CBC News

High prices for oil and gasoline have driven Exxon Mobil to the biggest quarterly and full-year profits in U.S. corporate history.

On Monday, the company (NYSE:XOM) said it made $10.71 billion US in the fourth quarter and $33.13 US billion for the year.

The company owned the previous records for quarterly and annual profits.

Exxon said it made $1.71 US per share in the last three months of 2005, up from $1.30 US a year earlier. Excluding onetime charges, the company made $1.65 US per share, well ahead of the $1.44 US that Wall Street analysts had been expecting.

The firm's fourth quarter revenues also rose sharply, climbing to $99.66 billion US from $83.37 billion US a year ago.

For the full year, Exxon made $5.71 US a share, up from $3.89 US in 2004. Full-year revenue rose to $371 billion US from $298.04 billion US.

Shares of Exxon rose $1.82 to close at $63.11 US on the NYSE.

 

[FiveParadox]

Should we be concerned when a corporation has a revenue of approximately one-fifth that of an entire country — i.e., Canada? That may be a sign in respect of possible unethical standards in relation to their pricing of product.

 

[tawker]

RE: Exxon makes record pr

Well, oil companies don't give a rip about people, it's all the bottom line.

Of course, do governments care about people, that is the big big question.

 

[FiveParadox]

Asking whether or not Governments care about people, when our Government consists of hundreds of elected persons not to mention the public service and our judiciary, is a hard question to answer; some people obviously do, and they are those we should promote; otheres, perhaps not so much.

 

[#juan]

My point was,

remember how gas prices skyrocketed during the time just after Katrina. The price of a barrel of crude never varied by more than a dollar or two but the price at the pumps shot up by up to 30 cents a litre. BTW, a barrel of crude contains roughly 28 gallons of gasoline. Now we find out that Exxon Mobil made record profits. Big surprise.

 

[Jay]

I think that's the way the market works....if there is going to be a shortage of processed fuels, the price is going to go up.

 

[#juan]

There never was processed fuel shortage and the price hikes were simply gouging.

 

[Jay]

Even a perceived market shortage will drive up prices.


"CBS) Hurricane Katrina disrupted oil supplies so President Bush today opened America's strategic reserve to lend some of that oil to refiners. With that, the price of crude fell today.

But the problem is the hurricane has also disrupted operations at the refineries that turn the oil into gasoline. So prices on the gasoline futures markets soared. "

http://www.cbsnews.com/stories/2005/08/31/eveningnews/main810382.shtml

 

[Toro]

There never was processed fuel shortage and the price hikes were simply gouging.

No it wasn't. There were legitamite shortages. Virtually every gas station in my Florida city was dry for the weekend after Katrina, not because of any evil corporate machinations, but because when consumers heard that a pipeline had been knocked out to Atlanta and there were true supply shortages, everyone went and filled up their car to avoid being caught without gas. Demand spiked and the trucks couldn't get here until Monday. Colleagues I know in state government where monitoring this demand as it was happening.

Plus, roughly 10% of refinery capactiy was taken out after Katrina. Capacity utilization for refiners was running at 93-94% before the disaster. To illustrate how sensitive refining margins are, when capacity is around 85%, refiners make $0. When its 95%, like it is today, they're making $10-$20 a barrel, depending on the refiner.

So its very easy to see how such a disruption could cause a price spike. You want gas in a shortage, you've got to pay. That's how its supposed to work.

 

[#juan]

That is just not true.

It was announced that there was no serious damage to refineries. The price hike over a week end because of a peak in demand would not account for the price increases of over a dollar a gallon. This is evidenced by the obscene rise in Exxon Mobil's profits.

 

[Jay]

"The move comes amid numerous predictions that gas prices will shoot up over $3 per gallon throughout California this Labor Day weekend. Bloomberg News reports that Katrina forced the temporary closure of at least eight refineries, responsible for as much as 10 percent of the nation's oil production. "

http://www.reason.org/commentaries/moore_20050901.shtml

 

[Toro]

That is just not true.

It was announced that there was no serious damage to refineries. The price hike over a week end because of a peak in demand would not account for the price increases of over a dollar a gallon. This is evidenced by the obscene rise in Exxon Mobil's profits.

"No serious damage" does not equate with disruption in supply. Several refiners were down in PADD-III weeks after Katrina. I was tracking the throughput in the region when it was happening. I was communicating with people who were talking to the oil companies almost daily.

Oil is $70 a barrel. That's why It has nothing to do with evil corporate machinations and everything to do with increased demand, the lack of new supply to meet that demand and the increasing marginal cost of bringing oil out of the ground.

 

[#juan]

Are you telling us that ExxonMobil

didn't make $371 billion last year, something like $ 73 billion over the year before. Right Toro, that was revenues. Profits are listed below.



Governor Speaks Out Against Oil Company Practices

POSTED: 6:29 pm EST January 31, 2006
UPDATED: 6:49 pm EST January 31, 2006

RALEIGH, N.C. -- Gov. Mike Easley is calling for a federal investigation into gas prices. Late Tuesday, he sent a letter to President George W. Bush concerning oil companies' multibillion-dollar profits.

The letter came in response to news that Exxon Mobil earned a staggering $36 billion in profit for 2005. That's the largest one-year profit of any company in the world. At the same time, motorists saw the highest prices ever at the gas pumps.

Easley wants a federal investigation of the oil companies and their escalating prices. In his letter, he asked President Bush to instruct Attorney General Alberto Gonzalez to immediately launch an investigation of the oil companies.

The governor also suggested that Congress enact legislation so oil companies can't use their power to artificially inflate oil prices, which led to these profits.

 

[Toro]

Yes, Juan, Exxon did not "make" $371 billion. Exxon made about $40 billion. You are mixing up revenues and profits. Big, big difference.

I'm not saying they're not making a lot of profits. What I am doing is refuting your accusation that this is because of manipulation. The profits being made are because the price of oil and nat gas is high.

Oh, and golly, a politician investigating the big, bad oil companies. How shocking.

 

[the caracal kid]

well,

given that companies like Exxon have control over their own entire system from "the well" to "the pump", it would not be too difficult for them to manipulate supply and thus price. Yes or No, Toro?

 

[Toro]

No. You cannot do it without collusion.

The marginal cost of getting the stuff out of the ground is the marginal cost, and the price paid at the pump is highly competitive.

Plus, its not that simple. All of an integrated's oil production does not go to its own refiners. For example, California is supplied by oil from Alaska, much of it pumped by BP at Prudhoe Bay, and that oil is heavy and sour. So most of the refiners in California are complex refiners to process heavy, sour crude. And most of those refiners are not owned by BP.

 

[the caracal kid]

ahhh yes, collusion.

there seems to be calls for investigations into potential collusion within the oil industry from time to time. It will be interesting if they ever find "the smoking gun".

 

[Toro]

Re: RE: Exxon makes record profits

ahhh yes, collusion.

there seems to be calls for investigations into potential collusion within the oil industry from time to time. It will be interesting if they ever find "the smoking gun".

And at times, I'm sure they'll find something.

But 98% of the time they won't.

Its an old political game, to make the politician look like he's on the side of the people, since its the people who wind up paying more. Its good political optics.

 

[Jay]

Is anyone surprised that most of the chocolate bars in the gas stations are the same price?


(I think I'm borrowing that line from you Toro)

 

[Jo Canadian]