A little Perspective Behind Exxon's Oil Profits

dirty

dirty

EOG Master
THOSE EXXON MOBILE PROFITS
Yesterday the world's largest oil company, Exxon Mobil, announced their quarterly profits. They raked in $10.7 billion last quarter. That should make their shareholders happy. That brings their total yearly profit to $36.13 billion. That's a nice chunk of change.

But you know what such news means. It's time to drag the oil executives back in front of Congress...to complain about the mythical, non-existent "price-gouging." Politicians will wring their hands about how Exxon Mobil is stealing money from people...and not "giving back" to the community. All of this, of course, is thanks to the government schools that churn out people who have absolutely no understanding of basic economics.

For the less-educated, here are a few pointers:
  • Exxon Mobil doesn't set the price of oil, the world market does. They're just cashing in. That price is determined by supply and demand, and nothing else. Sorry. If you want oil to be cheaper, you have to drill for more of it, bring to market and drive down the price.
  • The oil companies are doing what they're supposed to. It is the function of a public corporation to make as much money as possible for its shareholders.
  • If we expect to drill for more oil...and refine more gasoline...where do people think the money to do that will come from? Reinvested oil company profits, that's where. Somebody has to pay for exploration.
At the end of the day, it is the radical environmentalists that are making oil companies rich. The tighter the supply, the bigger their profits. So now you know who to blame!
 
B

bilbal

EOG Enthusiast
Over the last few years the value of the US dollar has fallen and as the US dollar falls, so do the earnings of oil producing cartels like OPEC. A weaker dollar buys us less oil and gives them less buying power. They need to make up the difference with higher pricing.

Also, there is not a shortage of oil on the world market, but there IS a shortage of oil that most US refineries will accept. American oil companies like Exxon Mobil have spent decades processing oil for profit and rarely spent any of that profit on building new refineries. What this means is that very few of them can process the heavy, high-sulfer crude that is now flowing out of the wells of Saudi Arabia. Most refineries have to reject this oil and wait for the oil that their refineries can process.

Overall, I think inflated energy pricing is the best long term energy policy the US can come up with. It's the only time Americans seem to respond with consuming less energy and thinking forward to alternative sources.
 
dirty

dirty

EOG Master
bilbal said:
Over the last few years the value of the US dollar has fallen and as the US dollar falls, so do the earnings of oil producing cartels like OPEC. A weaker dollar buys us less oil and gives them less buying power. They need to make up the difference with higher pricing.

Also, there is not a shortage of oil on the world market, but there IS a shortage of oil that most US refineries will accept. American oil companies like Exxon Mobil have spent decades processing oil for profit and rarely spent any of that profit on building new refineries. What this means is that very few of them can process the heavy, high-sulfer crude that is now flowing out of the wells of Saudi Arabia. Most refineries have to reject this oil and wait for the oil that their refineries can process.

Overall, I think inflated energy pricing is the best long term energy policy the US can come up with. It's the only time Americans seem to respond with consuming less energy and thinking forward to alternative sources.
Click to expand...


Very good POints.....But one Reason the Oil companies can't Build new refineries is that The Environmentalists and the EPA have put a halt to it.....Look at the situation for trying to Drill in Anwar
 
You must log in or register to reply here.
Top