Thursday, April 28, 2005

    Poor Oil Companies

    So did you really think that high prices for crude oil meant that the net profit for oil companies would stay the same? I'm talking about their margin - take their gross income and subtract their costs and that is their margin, their net profit.
    One might think rising crude oil prices being passed to consumers wouldn't really change the net profit of oil companies, right? Not so. A couple of stats of the oil companies (from an e-mail from the WSJ - can't link to a subscription e-mail, sorry):
    • Exxon Mobile - first-quarter net earnings surged by 44%
    • Shell Group - first-quarter net earnings rose 40%
    • Unocal Corp. - first-quarter profits (net) jumped 69%
    Perhaps the oil business isn't as bad as we were led to believe.


    Pundit said...

    For 30 years the oil companies have been complaining that we have these repeated shortages not because of mid-east cutbacks but because they lack the additional refining capacity. But as long as they can reap these grotesque profits, they will never increase their refining capacity because new refineries cost money. True, the eco-pagan nature religionists have blocked many efforts at expanding our facilities here in the U.S. but with enough money, anything can be done.

    Pundit said...

    Also tells you what happens when gas goes up to $2.50, $2.60 or $3 a gallon. Oil companies are like vegas cheats--if they can make a little, they will keep pumping it up as long as they get away with it.

    Chipman said...

    Very True ... nice job.


    Jami said...

    Perhaps not. Why not buy a Hummer to really show OilCo your love? Heck, why not just give them a hummer?