Record Oil Company profits...
 

Oil companies worldwide continue to 'cash in' as they choke to death economies like here in the US.

Here's an AP article on more record profits for these greedy companies:



By JANE WARDELL, AP Business Writer
Tue Apr 29, 12:36 PM ET



BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted forecast-busting first-quarter earnings on Tuesday thanks to record crude oil prices that are expected to bolster profits across the industry.

The combined profits of $17 billion reignited calls for a windfall tax on oil profits as consumers struggle to pay for food and fuel.

British Prime Minister Gordon Brown suggested that some of those profits should be reinvested in costly exploration for new oil reserves in the North Sea.

BP posted a 63 percent surge in first-quarter net profit to $7.6 billion (4.9 billion euros), while Shell reported a 25 percent rise, to a record $9.08 billion (5.81 billion euros).

Revenue at BP jumped 44 percent to $89.2 billion (57.1 billion euros), while sales at Shell soared 55 percent to $114 billion (72.95 billion euros).

Last week ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. producer far outpaced industry expectations. More big profits are expected from the biggest two U.S. companies, Exxon Mobil Corp. and Chevron Corp., when they report first-quarter earnings later this week.

Crude oil hit $111.80 per barrel during the quarter, while gas jumped an average of 22 percent. Crude has pushed even higher since, reaching a record $119.93 per-barrel this week.

BP shares jumped 6 percent to 613 pence ($12.18), while Shell rose 4.5 percent to 25.83 euros ($40.39).

The enormous profit reports from European companies coincided with the end of a two-day refinery strike in Britain that shut off 700,000 barrels of oil per day, brought from the North Sea to a BP plant.

Truck drivers staged a protest in London's Park Lane on Tuesday, blaring their horns to protest a 30 percent rise in the price of diesel over the past year. A similar protest took place in Washington, D.C. on Monday, and it wasn't the first.

"The price of fuel is becoming something many families are struggling with," said Sheila Ranger, a spokeswoman for the RAC Foundation, a commuter advocacy group. "This will be the last straw for some motorists."

Shell's Chief Financial Officer Peter Voser said oil companies are not to blame.

"We don't understand the oil price at this stage," he said. "The fundamentals will not justify an oil price as we see it at the moment."

Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.

Stripping out the impact of oil inventories that have risen in value, refining profits would have fallen 20 percent, Shell said.

"It seems that better marketing and trading were able to offset the weak refining environment," analyst Alexandre Weinberg of Petercam.

Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia's Sakhalin Island to a state-run enterprise.

BP's profit follows an even rougher period for the company from production outages, U.S. environmental fines and fraud and the scandal-tinged departure of its chief executive.

Chief Executive Tony Hayward, who took over from John Browne a year ago, has focused on bringing new production and refining capacity on line to improve earnings.

"At last, it appears that BP is beginning to improve its operational performance and this looks set to drive a stronger financial performance in the second half," said Tony Shephard, analyst at Charles Stanley & Co.

BP's closely watched replacement cost profit rose 48 percent to $6.59 billion (4.34 billion euros), compared with $4.44 billion in the first quarter of 2007. The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance because it excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices.

The company said refining availability improved for the sixth successive quarter.

"BP is still not firing on all cylinders but its operational turnaround looks to be on track with a strong second half recovery in prospect," said Charles Stanley & Co. analyst Tony Shephard.

The Demand for oil worldwide
is insatiable. What the heck do
we expect?

They cant get it out of the ground
quick enough. If demand goes down,
prices will follow. There need be no
secret meetings between oil companies.

The people are two deep waiting for their
icecream. Are you gonna stop selling?

All of these side issues are fine and dandy.
Bottom line is stop driving the car, flying the plane,
using the truck and boat to transport goods. These
engines all use some petroleum distillate. China is now
using more pet. that the US.

Game on. India waits.

way too complicated.

reminds me of econ 1 and 2. yawn.

boogiemen are easier to understand.

Everyone wants oil.
Prices go up.

Companies that are associated with
a product that is in high demand and is limited have
a difficult time doing poorly.


Stop the blame game and ride a bike.

I have no background in Economics.
No classes ever taken.
I await education on a difficult topic from heaven.

I would seriously like to be told why oil companies
should not be making big profits given current conditions.

supply curve stable or down

plus

demand curve up

equals

boogieman curve through the roof.

Alrighty then.

There is no true competition in the oil market. A very few companies
control the entire market. We are basically slaves to these companies.
If they decide to charge us $4.20 per gallon, than we have to pay and
that is it. It is not like we can drive down the street and get a
better price and they know it. You don't really "shop around" for gas prices.If that was true,then you would see some much lower prices at some stations,but it isn't a free market situation.Don't you remember in the mid 80's when the price of oil was low,and The 1st George Bush was vice President? He went and talked the Saudis into keeping production low,and the price of oil went back up.If this was a free market system involved,then you would have many more companies involved here with refining oil.What do we have 4 or 5? Don't you think others would like some of those huge profits? Why do you think it is that there aren't hundreds of oil companies involved here? Why is it you shop around for the best price of a new computer,but not for the best price of a gallon of gas?With computers the difference in prices is quite noticeable.The price between brands of gasoline? Not much.When was the last time gas prices went down substantially? Wasn't it before the November 2006 election?I told ya at the time to take note of it.

everyone should have seen the writing on the wall when all the small companies were being gobbled up by the large. can't beat the competition? buy it.
so, you have a few super companies, and absolutely no competition. and then you have high prices, because who's going to act to bring them down? it's the 'governments fault' in that the regulatory bodies allowed all these mergers to happen. and now we pay the price, yet again, for lack of foresight.

OPEC will keep raising the price till it train wrecks the U.S. and then it will buy up the wreckage with the profits. All this in the next 10 years?

If it were as simple as supply and demand.. then why are the PROFITS so high? The oil companies claim the prices go up because of supply issues.. but shouldn't increased cost cover the revenue supposedly lost by the lower volume of sales, not create ridiculous profit margins? Why are other fuels/energy sources we rely on REGULATED, and Oil is not? Natural Gas and Electricity rates/prices are regulated, because everyone needs these... Oil is NO DIFFERENT. Our economy and the world are clearly dependant on it. You can't provide goods and services without it.
I love when people say if you don't like it, 'Stop driving." OK, you can tell the INDIVIDUAL to do that.. what about Businesses that rely on transporting those goods and services?? Guess what, now we are not only paying high prices at the pump, but also when we check out at the grocery store, mall, or any service provides.
There's a food crisis in multiple countries around the world? Why? Because of the higher cost. Why?? Because of the cost to transport that food.
And what about School Districts?? Should we stop busing the kids to school?
Municipalities?? Should highway department vehicles/crews stop maintaining the roads?
POLICE, FIRE DEPARTMENTS, AMBULANCE SERVICES?? Yeah, they should stop driving too. Sorry, Billy, the ambulance crew is 4 miles away, so they'll be here in an hour because they are WALKING here..maybe.
If oil prices were actually regulated, the cost would be half of what it is right now.. and those companies would still be in the black. It's greed. And it's decimating the American and Global economies. Ok, I'm getting off my soapbox now.... What's the latest on Big Brown??.. I haven't heard much about him lately... :rolleyes:

You've got to be kidding me.

If I tell ya some other commodity is too high,then the answer is gunna be either,don't buy it,or sell it yourself(if you think it's such a good business to get into.)In this case,the fact is you can't do the latter in this country.That's why there are so few companies involved here.When they say oil company profits are up,it ain't like when they say hi-tech company profits are up.Hi-Tech companies would mean that a lot of companies are doing well.In this case,what? 4 ,or maybe 5 (at the most) are involved.So,you have a lack of competition involved in the problem right there,and then you have the countries that actually have the oil to pump (out of their ground) openly getting together to control supply(OPEC.)THIS IS NOT A FREE MARKET SYTEM.IT IS NOT CAPITALISM.It's more like when the mob gets together and pays off politicians.As long as countries (getting oil out of the ground) continue to get together and talk about the amount of oil they put up for sale,then it's not a free market.Same with having limited number of oil companies in this country.They don't have to compete.There is no competition involved in any of this.I have no problem with people who want supply and demand to rule.Of course,we should use less,but you're not noticing that it's the supply that is contantly being kept low by those involved (you will never get the supply high if you allow these people to contantly talk, and agree to keep supplies low.)Obviously there is a lot of profit being made in this industry.So there should be a lot of companies competing for that profit(and giving you a fair price.)That would be a free market.What we have now is not a free market system.

big brown got the 20 hole

scuds - what about demand from china and india - isn't this causing some of the increase?

Have you ever really heard anyone say there is plenty of oil? Not much,right?Unless you have competition,you are gunna be reliant on 4 or 5 oil companies refining only as much oil as they want.You're also gunna be reliant on OPEC to pump as much oil as they conpire to pump.Do you really think they are ever gunna say that there is plenty of gas."We are gunna lower the price,because we have so much that we need to get rid of some." That situation won't happen unless you have more companies refining oil.It's pretty much like what the A.M.A is trying to do with medicine..."Keep medical care rare and expensive." The price of gas dipped before the 2006 Fall election..right? They wanted you to keep electing the people in charge(at that time the Congress ,Senate,and Presidency were all Republican majorities that favored 4 or 5 oil companies going without honest competition.)Weren't China and India using oil then..LOL..?

Look at oil prices in other developed countries.
We got it lucky here.

Do people actually believe Oil companies are somehow
holding back oil like De Beers with Diamonds?

Again I ask.
Please explain in English how a product
that has such a high demand with China now eating
it at a higher rate than we do, and India gearing up,
not make big profits?

How?

And why the heck should oil companies even worry
about spending money on drilling off the Pacific and in
Alaska. We wont let em.

So how many people are you guys gonna carpool with
to work? Got your bike to get to the grocery store or
go to the park? Does your car get 60 miles per gallon?

Pillow got what he wanted. It is going to force
people to change habits. Subways and buses.

You can make it yourself Scuds.
Save that trash. Use that Biofuel YOU can
produce. Good luck making it cost effective.
Even with 10 dollar gas.

Supply has and will be a constant problem with
so many restrictions on drilling. THis is not a new problem.
Consumption, consumption. Tell the Chinese to stop driving.
And then talk to India in 2 years. Or move to Europe. Only 7 or 8
dollars a gallon. AMERICANS love the freedom of driving where
they want when they want. Thats got to change.

BTW.

The CEO of Shell has spilled his guts.
He has already concluded we (US) are in trouble.
Surprisingly he does not need money.

He has talked with all the major candidates,
gone on record with plans on city mass transit possibilites,
cars that are fuel efficient, they have a number of pamphlet
on all these ways to drive less. He is horrified with the prices.

Wonder why Obama and Clinton are not bashing oil
companies day after day. Dont you think that would
work well for good democrats? Collusion and all that rot.
Oh yes, the candidates are all being paid off. These American
Oil Companies have been in front of Congressional subcommittees
so many times once gas hit the 3 dollar mark and then waivered
back and forth. They have had to spill records on meetings,
they have been bombarded.

Both candidates are looking for conservation and new
technology. Thats their thrust. They are not busting
on the oil companies near as much as they could.

Again it is a case of oversimplification. Price fixing.
Thats the basic problem. And its easy because it
affects everyone of us who drives, pulls horses in trailers.
The problem is you cant fix a problem by playing
a continuing game that is not yeilding results.

It is not a simple problem. Consumption is by far the
easiest way to allieviate pain. So every one write down
the new car you purchase that gets extremely efficient
gas mileage... when it actually hurts enough economically.
I am in the market. I would like to know the pitfalls, good
points behind the hybrid. Anyone who actually owns one
and drives it, help.

scuds - worldwide demand has outstipped supply , either demand has to fall or supply has to increase for px to fall - also oil is px in usd - as our currency get weaker the px in usd goes up which hits us in the pocket - bernake is cooked he can't keep cutting rates to help the consumer in this country who is already overexteneded to help prop up the housing mkt

ths will weaken our currency even more and make oil more expensive , we are in a tough spot here

o'rielly had clinton on last night and she says eveyone is to blame - funny eneough she did not answer some of his questions about why she voted against certain new drilling projects and he didn't press her on it, but, dennis miller came on and told o'rielly he did press her hard eneough on the issue

It's pretty clear why they are making big profits, because they are charging so much! No one can deny that. But when these oil companies claim they're raising prices because of 'supply concerns'... that's bullshit. Remember shortly after Katrina hit the Gulf Coast? Prices skyrocketed with claims of supply issues. Sure... the prices don't go down as fast as they climb.. funny how that works.

So, you believe world demand has jumped at least 4X what it was just 10 years ago? I find that hard to believe. A gallon of regular gas was under $1 in most places in the U.S... as low as 70 cents ... now it's pushing $4... there's more to it than 'demand'... IMO.

you noticed that too. so did i , it goes up .70 cents then drops .30.......funny how that works !

PGRDN,I don't read your ****,o.k.? Say what you want,but this is not a free market competition.As long as it remains this way,they will just keep limiting supply(no matter what the real situation is.)I understand that it is a good thing for the people in your state(overall) to be able to rape the people of this country by not having a fair competition in the market place.Facts are facts,and there aren't enough oil companies in America to insure good competition for the consumer.We seem ignorant of this most basic fact.Until you look at the fact that oil producing countries talk to each other about how much they are going to produce,and U.S. Oil companies talk to each other about how much they are going to charge,then there is no reason to expect there to be anything but a constant shortage of gasoline.How can there not be that? There is no competition,sir.You can't see this? You want to blame it on us not using less,or China using more? Guess what? No matter what,they are gunna have some excuse to explain why there is short supply,but the main reason is because it favors them to have short supply.The obvious problem #1 is there isn't enough competition in this market.I don't know how you would ever expect a fair situation if you don't have competition.It goes against any common sense.Yea,they are making more and more profits because they don't have to cut prices to compete for your business...o.k.? This is eluding you.You have a brain block.

demand has increased i don't have the exact figures, but, take a look at a chart between the usd and the px of a barrell of oil, seems to me that as the dollar drops as it has been for the last number of years the per barrell price of oil has increased - there is a direct corelation to a weak dollar leading to higher oil prices - when the foreigners sell us there oil they get paid in usd. if the usd is falling the only way to cover their losses on the usd is to raise the prices per barrell that with demanded outpacing supply pushes the price higher -

both parties are to blame here Scuds - bill clinton didn't attempt anything in his 8 years on this issue so to pass the blame to the current administrsion is not fair

hillary voted against anwar and other offshore drilling projects as did many senators in both parties

i dont think we have had a new refinery built in the country since the 70's

The thread is about record oil company profits? O.K....The reason there are record oil company profits is because they don't have to compete for your business.They all agree to keep the price as high as possible.It's not like airfares where you have airlines competing for your business.Whatever the price of gas should be (based on competition in the market place) will not be known until this problem is tackled.There are a lot of things brought up here to explain why the price of gas is high.The price of gas is one thing,and the profits of oil companies is another.The latter will always be very high if they don't have to compete.I can live with high gas prices,but I am tired of the lack of competition that exists between a limited # of oil companies in this country.We refuse to make them compete with each other.With that fact,how can there ever be anything but huge oil company profits? It will remain huge until there is competition involved in the pricing of gasoline.This is not hard to understand.You will never ever know the price you actually should be paying for gas until you have free-market competition involved in the pricing of gas.Maybe it should be $4 $3 $2.75 ,or whatever,but you won't know until competition is involved.All you have to do is compare it to the airline industry.If you have free market competition,then you will be able to "shop" for the price you pay to fly somewhere.Try flying to Cincy sometime.Guess what? It's outrageously high to fly into there(or it was last year.)Why? No competition.Delta has a monopoly.Is it still this way,Cannon?

but scuds other indutries have had record profits and the public wasn't against them

a couple of years ago the banks and mortgage co's made record profits and nobody said a word because eveybodies house went up in price

when the gov't broke up the standard oil trust back in the early part of the 20th century they thought it would be better , but, in fact rockefeller became the richest man in history after the break up of standard oil - why not go back to 1 oil co with 1 guy controlling it , it seemed to work better that way as he kept everyone in line

the other thing scuds profit margins are around 7 % for most of these co's do you think that is absurd?

if you want to start regulating industry look out there are a lot more out there that have profit margins higher than 7 %

Obviously,their profits are absurd.They wouldn't be if there was price competition.There is very little competition going on.There are a lot of reasons for high prices,but only one real main reason their profits are this high(no price competition.)Regulate? How about it works like other free market systems,and have many companies competing by offering the best prices possible for the consumer?

scuds the price for the barrell of oil goes up every time the usd falls

until the falling usd gets fixed the px of oil goes higher in my opinion

oil is px in usd - middle east needs to sell at higher price if usd is worth less

we need to start supporting our currency

I miss you, Marty. :(

damn its cold up here in ny for may send up some of that sunshine

Yes,but the thread isn't about the cost of oil .It's about the huge profits of oil companies,and that mainly comes from them agreeing on prices of gasoline(don't compete with each other.)

If you broke down a $4 gallon of gas, what % is the original crude cost, what % is refining, taxes, etc? I've seen that before, but can't remember. I know the gas station owners aren't the ones getting rich either.

Bullshit.
Show me the meetings.
Show me the facts.
This has happened before
but at a diff. level.

They have been called to the floor on this many times.
Again, if you have ever watched C-Span, you know they
are constantly called in on this and there is no evidence of
your claim.
The Oil companies have to supply our government
with so much information... if you were a small businessman you
would never take on all this regulation.

I will again ask: Can you tell me any other time in the history
of the world when so many countries are consuming petroleum?
I hate this crap as much as anyone else. Why in
God's name would anyone dare to defend the Evil Oil Empire
when its so easy to just totally blame them?

Does anyone understand that China is consuming more oil
than the US (for the first time) and that their economy is absolutely bursting
wanting more? Does anyone see that India is right behind?
Does anyone see that there are too many people after something
that is limited in supply? I think I understand how this drives the barrel
(a future price) sky high. We are paying far less money for gasoline than almost any country barring Venezuela (their government subsidizes it, so the people trade gas for food across the border... wonderful) Why do we pay less than almost any developed country in the world? Can anyone answer this?

Finally, I ask again: Please explain why oil companies should
not be making high profits with demand at an all-time high?
Dont say price fixing when you cant explain cost differentials
in diff. countries and without evidence.
Oil company numbers are right there in gov.
records for all to read. They are one of the most exposed,
highly regulated businesses in this country.

Scudsian economics. Make it easy and blame the easiest
target. Makes you feel good. But it will not solve the problem,
because it is not the real problem.

Stop consuming.
Then you wont notice the prices.

Yes I know.
The questions are too difficult.

And you are trying to solve a problem
that is not the real problem (price fixing, competition).
Good luck.

Why is it we have the cheapest gas of almost any developed
country?

Got many more questions.

You can go and buy your own oil by the barrel.
Transport it, refine it, and pull out your own octane.
You will need some papers to send to the government.

Yea,we don't deserve competition involved in the oil industry ,right? Lets just overlook that little pesky fact.Just don't answer the question.Ask new questions,right? I know your ways of avoiding what you don't want to answer.Wouldn't want to give Americans a better deal,right? Gotta keep those 4 or 5 companies making 30-40 billion a year,right? God forbide we get them to stop the collusion ,and have more companies involved in the situation.Wouldn't want to give some single parent family a fifty cent break per gallon, right? Gotta keep giving it up so these 4 or 5 companies can make those record billions right?Don't mess with TEXAS!! Don't mess with that lil monopoly they got going.I said I ain't reading ya ****,and then I did it.I am tired of ya bullshit. That's it for this subject.You make me sick.Carry on,but I'm done with this pathetic subject.It's a loser.We just can't stand up and do the right thing when it comes to cleaning up this monopoly.

Like pounding on a brick wall.
Its pathetic because its difficult.
You always see the world in terms
of the big guy picking on the little guy.

And it just does not explain every inequity.
It makes you feel like you got a handle on
something you dont. Its as bad as a superstition.
You use the same theme to explain every economic
problem. Health Care, etc... these are very difficult
problems that you would like to be easy.

Just for once seek the other side of an arguement,
even if you dont like it. Just try and read about it
instead of automatically seeking the information that
suits your notions.

If you were as honest with this stuff as you
are about assessing the ability of horses
we all might learn something.

Would also like to see the breakdown for a gallon of milk.

All this fuss and milk is still more expensive than gas. Go figure that out.

How about some sympathy for Exxon shareholders who saw their share price go down over 3.5% yesterday while the overall market was steaming up?

SentToStud's Rule #1: own an oil stock. Better yet, own two. A little company I like a lot is Parker Drilling.

Its called Fuel Surcharge.