Bogley

[CarpeyBiggs]

:eek2:

Link

Exxon Mobil 1Q profit up 17 pct, Marathon edges up 2 percent

By JOHN PORRETTO – 6 hours ago

HOUSTON (AP) — Don't expect motorists to sympathize, but Exxon Mobil Corp. says gasoline prices didn't do it any favors in the first quarter.

Still, the world's largest publicly traded oil company said Thursday it earned $10.9 billion to start 2008, the second-biggest U.S. quarterly profit ever. The smaller Marathon Oil Corp. said its profit rose 2 percent to $731 million, well ahead of Wall Street forecasts.

As in the past, the extraordinary results from Exxon Mobil prompted critics to insist the company and other major oil producers were profiting at the expense of frustrated consumers, who are paying more than ever to drive. Indeed, retail gas prices on Thursday rose to a new high above $3.62 a gallon.

But because gasoline prices have not kept pace with oil's stunning ascent to triple digits, Exxon Mobil and other big oil companies have seen far lower margins from refining and selling gasoline and other petroleum products.

That's because Exxon Mobil and others don't produce enough oil to satisfy their refining operations, so they have to buy crude at market prices too.

Exxon Mobil said earnings at its refining and marketing arm were off 39 percent in the most recent quarter, one reason overall results fell well short of Wall Street's lofty forecasts.

Year over year, however, earnings for the Irving, Texas-based company rose 17 percent, lifted largely by record crude prices. The only higher total in a three-month period was the $11.7 billion Exxon Mobil posted in the final three months of 2007.

"In an environment of high commodity prices, Exxon Mobil's outstanding portfolio of integrated businesses performed well, allowing us to deliver record first-quarter results," Henry Hubble, the company's vice president of investor relations, said on a conference call.

Not everyone was celebrating, particularly given the sluggish economy and housing crisis.

"Oil companies are racking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices," U.S. Sen. Charles Schumer, a New York Democrat, said in a statement. "It's time for Big Oil to pay its fair share."

He and New York's other senator, presidential candidate Hillary Rodham Clinton, have called for a windfall tax on oil companies. Clinton wants such a tax to pay for a proposed three-month suspension on the federal gas tax. Republican Sen. John McCain also supports the so-called gas-tax holiday, though he wouldn't place the burden on oil companies.

Already this year, top executives of the country's five biggest oil companies were hauled before federal lawmakers to explain their profits and assure customers they weren't being gouged. Their overriding sentiment: Don't blame us.

At a hearing last month, the executives said they understood that record fuel prices were hurting consumers but argued it's not their fault and their huge profits were in line with other industries.

Crude prices, which reached a record $119.93 a barrel this week, have already led to bountiful first-quarter profits for several other major oil companies, despite higher costs and lower results from refining.

BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted combined profits of nearly $17 billion this week — $7.6 billion for BP, up 63 percent, and $9.08 billion for Shell, an increase of 25 percent. ConocoPhillips reported a 16 percent rise in net income last week to $4.14 billion.

Chevron Corp., the No. 2 U.S. oil company, is expected to continue the trend when it reports first-quarter results Friday.

In defending the huge profits, industry advocates note that oil companies invest large portions of their profits back into their businesses.

In March, Exxon Mobil said it expects to invest between $25 billion and $30 billion on capital and exploration projects this year, up from about $21 billion in 2007. The company said it expects to maintain that level of spending through at least 2012, as it tries to tap new reserves in all corners of the globe — an increasingly difficult and expensive endeavor.

Citigroup analyst Doug Leggate said in a note to clients that while Exxon Mobil's results were lower than expected, a "good suite of new projects" will likely keep its production stable — a positive note given the challenge of finding new sources of fossil fuel.

Exxon Mobil's first-quarter profit amounted to $2.03 per share, up from $9.3 billion, or $1.62 per share, a year ago. Wall Street was looking for $2.13 per share. Revenue rose to $116.8 billion from $87.2 billion, well below analyst forecasts of about $124 billion.

That sent Exxon Mobil shares down $4.19, or 4.5 percent, to $88.88.

At Marathon, earnings for the period came in at $1.02 per share and revenue jumped 39 percent to $18.1 billion, helping its shares surge $2.33, or about 5 percent, to $47.90.

Like its larger competitors, Houston-based Marathon said its refining and marketing operations were hurt by much lower year-over-year margins.

Exxon Mobil said significantly lower worldwide refining margins reduced its quarterly earnings by about $1 billion. Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.

Crude prices in the first quarter averaged about $98 a barrel, nearly 70 percent higher from the same period a year ago. Meanwhile, gasoline prices rose about 22 percent.

Exxon Mobil does not release the amount it pays for crude but said it's been in line with market prices.

At the same time, the company said it made about 4 cents per gallon on petroleum-product sales in the most-recent quarter, down from 8 cents a gallon in the year-ago quarter. Those products include gasoline and diesel.

Exxon Mobil, which produces 3 percent of the world's oil, said earnings at its exploration and output, or upstream, business rose 45 percent to $8.8 billion with help from higher oil and natural gas prices.

Overall production fell 5.6 percent from a year ago, in part from natural field declines and maintenance.

[deathcricket]

I have this interesting theory which I would like disputed please.

Gas prices aren't going up....

The value of our dollar is going down....

and it buys less gasoline, so it seems like it's more expensive. I've been trying to find out why gold is so friggin high also. Then I've been doing price comparisons on how much oil that using gold would buy. If you used a pound of gold and checked to see how much oil it would buy, then calibrated that price and converted it directly into oil. It seems like oil has actually gone down.

I'm at work, so I don't have my links on where I've been getting my numbers. But wondering if this is even a valid way to quantify what the problem truly is. Is it a valid comparison to say that 5 years ago gold was at $500/lb and oil was at $50/barrel and now gold is at $1000/lb abd oil is $100/barrel that oil has not really gone up? Again using figurative numbers, but those should be easy to verify. I'm just wondering if my thought process is correct? We can't really be blaming "the world" for getting more expensive yeah?

:ne_nau:

[JP]

deathcricket wrote: Gas prices aren't going up....

The value of our dollar is going down....
That definitely plays a big role in it. If the dollar gets stronger, that in itself will relieve some of the cost at the pump. Some believe they are trying to phase out our currency like they did in Europe to come out with one standard of money like the Euro. So, our money would be worth the same as say the Canadian and Mexican currency. Obviously there is a lot involved with all of it, standards to meet and such, but it has proven itself in Europe.

[sparker1]

At $1000/lb, I'll take all the gold you can supply. Most markets sell it by the ounce. :nod:

[UtahAdventureGuide]

if there was a direct correlation between the price per barrel and the price at the pump then the big oil groups wouldn't be posting record profits every quarter.

yes, the value of the dollar does drive up the cost per barrel but it will not add to the profits of big oil.

personally i think the oil industry is taking advantage of the situation. all major news outlets reported possible $4.00 / gal. gas prices this summer, so what's stopping big oil from making that happen?

all i know is it costed me $75.00 to fill my tank on Wednesday and costs me almost $20.00 a day to drive to work.

Chris

[UtahAdventureGuide]

Hey Dan, Good to hear from you... Hows Alaska treating you?

I've got a good friend up there named Jeff Schively. If you're interested in exploring Alaska he's your guy, I haven't seen him in about 10 years but we started big-wall climbing together in Zion in the early 90's.

his email address is at the bottom of this page:
http://www.sws.org/regional/alaska/alaska.html

[Rev. Coyote]

UtahAdventureGuide wrote: personally i think the oil industry is taking advantage of the situation.

Of course. The scary thing is the fuel situation imperils the other primary industry in this country. Already hitting us HARD in the forest products sector. So, when big oil crushes the economy then what?

I hate short-sighted piss-poor corporate citizenship. Big oil is like the neighborhood child molester in corporate America.

[trackrunner]

Why, why, why did I sell my shares of Exxon Mobil? With the price gain and the dividends I could rolling around in my money like Scrooge McDuck laughing at all you little people. Now I'm one of you little people because I sold out too early.



Demand for gas is very inelastic in this country. For you non-economics nerdy majors it more or less means consumers will take it up the rear and pay the high price because they can't live without gas. Whenever this happens though consumers eventually find alternative goods/services and new entrepreneur producers have economic incentive to come out with alternative products. High prices cannot be sustained forever; eventually consumers will switch to mass transit, more full efficient cars, alternative fuel, etc. What price will break the consumers back, $4, $5, $6, $10, $15/gal, or more?

Looks like I might be switching to veggie oil sooner than later.

[madsjim]

Profit equals = (Price X Quantity) - Costs

Pretty basic equation, but as price goes up and demand goes up, cost remains relatively equal. Profit naturally goes up. The sheer volume of units sold ensures that their profit would go up.

Lots of finger pointing at Petroleum companies, but never a good explanation of what they are doing purposefully to screw everyone? :ne_nau: How do they take advantage? Future contracts drive up the price, what is the Oil Biz going to do?....offer a lower price out of the kindness of their hearts?

As trackrunner said, eventually demand won't accept the inelasticity and alternative options will be cheaper. Then all you oil haters can laugh at Exxon. :2thumbs:

[Jaxx]

Bastards...

I think it was the CEO of Exxon that said that if the government stopped putting so much oil into the reserves then the price wouldn't be so high. I think I read that when Bush was put into office he upped the amount going into the reserves by 10 times. Of course I am too lazy to find a link to back up my rhetoric so take it with a grain...

[bruce from bryce]

Dam it, I wish profits resulted in higher stock prices. I've got a couple thousand shares yet the price is down for the year. Explain that to me? Maybe too many people going 'green' in their stock picks.

George Bush Senior released a bunch of oil at the beginning of Iraq 1 and despite the war the price actually dropped. Your assumption about the deposits this President continues to make probably hold a whole lot of truth.

[sparker1]

We need to drill into our own reserves, including ANWR. Bush has been trying to get that one approved since day one. Recently, he reiterated that position. One of the Democrat congressmen, who have been blocking that plan, says it is now "too little, too late" because it would take 8 years to begin feeling the impact of ANWR drilling. I'm pretty sure that we will still need it 8 years from now.

[JP]

sparker1 wrote: We need to drill into our own reserves, including ANWR.of ANWR drilling.
:nod: :nod: :nod: :nod:

[jimflint1]

The thing is, I can see making a profit. What I can't see is intentionally keeping their profit margin that high, when it's something every American depends on. Some will say that a profit margin that high is what a lot of products are receiving. True, but most companies are selling optional items. Gas isn't optional, realistically. The oil companies could increase good will by dropping their profit margin significantly.

Here are some of my other proposed solutions:

1) Allow more drilling for oil in our coastal areas, but not in pristine areas.
2) Allow drilling in ANWR---but only in the 5% of the area that is proposed, and mandate as little environmental damage as possible with strict rules.
3) Allow more refineries, and along with that, new companies to be involved both in refining of oil and selling of gas. The monopolizing of oil production is making competition null and void.
4) Make speculating on the price of oil a criminal offense.
5) Stop driving as much.
6) Write to Congress to increase grants, tax breaks, etc., for legitimate research and inventions that will lead to cheaper energy sources that actually work.

[Rev. Coyote]

Some ideas:

1) Amp up renewables. Biomass is already making really great gains. Diversify the whole energy portfolio.
2) Better conservation on everyone's part. Don't sacrifice the wilderness just because every thumb-sucking entitlement mentality baby-boomer asshole wants to live in a 7,000 s.f. house. Remember, a giant percentage of our energy is going into the heating and a/c of unused indoor spaces. And that's plain wrong.
3) More availability of little diesel cars. My Mom's diesel VW wagon gets 45 mpg. That trumps gasoline hybrids even.