big oil profits

[Buckterrier]

So the reason for the huge profits according to the oil companies is "the price of crude is up".
The goverment will GRILL dumb jocks about roids yet let the suits off the hook for raping the public. Nice, REEEAAAALLLL Nice

[red-beard]

So what is the answer?

[TerryH]

It used to be supply and demand, then the demand shrank, but so did the dollar. Now futures are driving the price supposedly. It's always something driving the price up. Most of the time it's only speculative. Someone farts in Nigeria and we pay for it at the pump.

And the suggestion of removing $18,000,000,000 worth of tax breaks only made them threaten us with higher prices yet. They have the loaded gun and are not about to surrender anything.

So they are pumping us in both ends and we keep saying, "harder, harder".

[red-beard]

When did demand shrink?

And the basic problem is high demand, and a low value dollar. Gold is also way up.

Price controls = no gasoline. I remember the 1970's. If you can't make a profit, no one is going to make the product.

And as far as obscene profits, 8% ROI is crap. My company would fire everyone if our ROI was that low. These are GIANT companies. XOM is the biggest in the world. Market Cap of XOM is 452.5 Billion Dollars. 39 Billion in after tax profit isn't so great.

And yes, if you increase taxes on a company, it will pass the cost on to you. The price will go up.

[Superman]

I feel bad for those poor oil companies. Imagine their feelings as they rake in world record corporate profits while their customers' personal and business budgets are squeezed by sharply rising fuel prices and general inflation caused by increased transportation costs. I'll be they feel really bad. But.....I'm just glad we've got red-beard here to explain to us why those oil companies' consistent quarter-after-quarter, year-after-year record-breaking profits are probably in reality not enough. Those world record profits should actually be higher than they are.

Have some sympathy, guys.

[Buckterrier]

Originally Posted by Superman

I feel bad for those poor oil companies. Imagine their feelings as they rake in world record corporate profits while their customers' personal and business budgets are squeezed by sharply rising fuel prices and general inflation caused by increased transportation costs. I'll be they feel really bad. But.....I'm just glad we've got red-beard here to explain to us why those oil companies' consistent quarter-after-quarter, year-after-year record-breaking profits are probably in reality not enough. Those world record profits should actually be higher than they are.

Have some sympathy, guys.

I think we should all donate another .50 a gallon to get that ROI higher. There isn't a F'ing Co. in the country that wouldn't take 39 BILLION, that's BILLION $ profit, (quarterly?). God a billion is thrown around these days like a baby seal that's been clubbed to death.

[red-beard]

Yearly. And they are a $450 Billion dollar company.

Whatever. You are never going to understand. No point talking to a wall.

[Porsche-O-Phile]

"Whatever the market will bear"

If I were lucky enough to be an oil company exec, I'd tell Congress to go stick it where the sun don't shine. They owe nobody (other than their shareholders) and explanation for their behaviors and they certainly don't need Big Brother trying to stick their nose into their business.

Don't like their product? Think it's too expensive? Stop buying it.

[Buckterrier]

Originally Posted by red-beard

And as far as obscene profits, 8% ROI is crap. My company would fire everyone if our ROI was that low.

Then why aren't they all fired?

[red-beard]

Ask them.

[Buckterrier]

Originally Posted by Porsche-O-Phile

"Whatever the market will bear"

If I were lucky enough to be an oil company exec, I'd tell Congress to go stick it where the sun don't shine. They owe nobody (other than their shareholders) and explanation for their behaviors and they certainly don't need Big Brother trying to stick their nose into their business.

Don't like their product? Think it's too expensive? Stop buying it.

I'll bet you defended the Enron accountants also. "If you don't like their accounting practices not use them"

Originally Posted by red-beard

Ask them.

Um... like 39 BILLION dollars was pretty good. "But you'd better improve that ROI next year buster"

[legion]

I work in an industry that loses money 7 out of every ten years. The three years every decade that we make money, it has to be a lot to make up for the losses. Even though we always sell our product for less than it costs us to produce, we still get hauled in front of Congress and state legislatures to listen to ignorant, self important politicians lie through their teeth and just plain invent $h!t when we make money.

The oil industry is very similar. This is nothing but politicians posturing in an election year over an issue they can do absolutely nothing about. You want to ***** about oil prices to someone? Try *****ing to the cartel that controls 60% of the market in crude. Try *****ing to the sheep floor traders that bid up the price of crude (to borrow a phrase) when a butterfly farts in Nigeria. Try *****ing to the corrupt Soviet government that is purposefully creating confrontations with oil-producing countries to feed fear about crude supply and drive up prices. What we call "big oil" has very little ability to influence the price of crude.

Oh, and I didn't recall anyone *****ing when oil companies were forced to pump crude at a loss 7 years ago.

[gsmith660]

Originally Posted by red-beard

Yearly. And they are a $450 Billion dollar company.

Whatever. You are never going to understand. No point talking to a wall.

Are you in the oil business?

[gprsh924]

Originally Posted by Porsche-O-Phile

"Whatever the market will bear"

If I were lucky enough to be an oil company exec, I'd tell Congress to go stick it where the sun don't shine. They owe nobody (other than their shareholders) and explanation for their behaviors and they certainly don't need Big Brother trying to stick their nose into their business.

Don't like their product? Think it's too expensive? Stop buying it.

Exactly....vote with your gd wallet. Do I like expensive oil? No, but it isn't to the point yet that it will change anything for me or my family. We aren't selling either of our two SUV's, or our boat, or the waverunner. My dad is actually going to switch the DD from the 924 (25ish+ mpg) to the M3 (18-20 mpg). And we might get another boat for this summer. Until everyone who b*tches about oil prices all start driving civics or riding bikes, oil will be expensive.

[Rearden]

Originally Posted by red-beard

And as far as obscene profits, 8% ROI is crap.

A profit figure by itself doesn't mean anything. You must normalize it, make it comparable. So you make a margin figure out of it by taking the revenue into account.

Think of it this way. If I told you that Frank sold his car and made $50,000 profit, you might think that was a lot. If I told you he sold a standard 911SC, you'd think that profit was exorbitant. But if I told you the car was a $5 million 1962 Ferrari GTO, you wouldn't be as impressed.

[Racerbvd]

Wow, .08 cents out of every dollar is profit, that is obscene
But no one complains that the gubmit averages .42 and they didn't invest or take the risk.

State State
Excise Other State
Taxes Total State
Taxes Total Federal &
State Taxes

Alabama 16 5 21 39.4
Alaska 8 8 26.4
Arizona 18 1 19 37.4
Arkansas 21.5 0.2 21.7 40.1
California 18 14 32 50.4
Colorado 22 22 40.4
Connecticut 25 4.7 29.7 48.1
Delaware 23 23 41.4
Dist. of Columbia 20 20 38.4
Florida 13.6 16 29.6 48
Georgia 7.5 4.7 12.2 30.6
Hawaii 16 19.1 35.1 53.5
Idaho 25 25 43.4
Illinois 19 11 30 48.4
Indiana 15 3.1 18.1 36.5
Iowa 20.1 1 21.1 39.5
Kansas 23 1 24 42.4
Kentucky 15 6.4 21.4 39.8
Louisiana 20 20 38.4
Maine 22 1.5 23.5 41.9
Maryland 23.5 23.5 41.9
Massachusetts 21 0.5 21.5 39.9
Michigan 19 7.2 26.2 44.6
Minnesota 20 20 38.4
Mississippi 18 0.8 18.8 37.2
Missouri 17 17 35.4
Montana 27 0.8 27.8 46.2
Nebraska 24.5 0.9 25.4 43.8
Nevada 23 10.3 33.3 51.7
New Hampshire 18 2.6 20.6 39
New Jersey 10.5 4 14.5 32.9
New Mexico 17 1 18 36.4
New York 8 22.3 30.3 48.7
North Carolina 22.1 0.3 22.4 40.8
North Dakota 21 21 39.4
Ohio 22 22 40.4
Oklahoma 16 1 17 35.4
Oregon 24 24 42.4
Pennsylvania 12 14.7 26.7 45.1
Rhode Island 27 4 31 49.4
South Carolina 16 0.8 16.8 35.2
South Dakota 22 2 24 42.4
Tennessee 20 1.4 21.4 39.8
Texas 20 20 38.4
Utah 24.5 24.5 42.9
Vermont 19 1 20 38.4
Virginia 17.5 1.4 18.9 37.3
Washington 23 23 41.4
West Virginia 20.5 4.9 25.4 43.8
Wisconsin 28.1 3 31.1 49.5
Wyoming 13 1 14 32.4
U.S. Average 17.9 5.7 23.6 42

Of course it is always in fashion to blame those who took the risk & earn their profit, but why doesn't anyone talk about this??

MRC's Business and Media Institute just published a new study
entitled "Crude Coverage," that identifies the true culprit
and faults the liberal media for missing the mark. Click here
to discover who is really to blame for the oil crisis and what
the U.S. can do to fight back:


http://www.mrcaction.org/r.asp?U=5748&RID=11506018

And I don't say this because my favorite uncle worked for Standard Oil for over 50 years and maxed out the matching stock buying the whole time.

[Shaun @ Tru6]

I'm not interested in taking sides here, but I hope someone can do the math, maybe Sammy, on cost per barrel against margin.

If a barrel of oil costs $23 in 1997, what was Mobil's or Exxon's margin then? What was their profit?

If a barrel of oil costs $100 in 2008, what is ExxonMobil's margin and their corresponding profit?

What are the variances and where are those variances most pronounced.

This is interesting, from BusinessWeek, summer of 1997, cover story.



http://www.businessweek.com/1997/44/b3551001.htm

Partial paste:

THE NEW ECONOMICS OF OIL
With technology dragging down the cost of finding and producing the precious stuff, prices won't rise--even as demand soars

Crude-oil prices have been careening like steel balls in a pinball machine this autumn in response to news and rumors from the Middle East. In the first few days of October, the threat of armed conflict between Iran and Iraq sent crude prices soaring from $20 a barrel to almost $23, before sinking back down again.

Even as the world is reminded of the vulnerability of its oil supply, consumption is soaring. Americans have fallen in love with gas guzzlers such as the Ford Expedition. In newly prosperous developing countries, ordinary people can afford cars for the first time. A recent survey in the China Youth Daily found that 75% of Beijing families planned to buy a car within the next five years.

Yikes. Are we in for another oil crisis? You might think so. Fort Worth investor Richard E. Rainwater has 30% of his $1.5 billion net worth sunk in oil and gas investments because he expects prices to rise 50% to 75% in the next 5 to 10 years. With free markets fueling economic growth, says Rainwater, ''we should see a tremendous amount of pressure on prices.''

Perhaps. But there's another, quite different scenario--namely, that oil prices, adjusted for inflation, won't rise at all over the long term. They may even fall. Why? First, because producers in the Mideast and elsewhere need the cash from oil too much to let their supply be interrupted for long, despite political and military skirmishing. Second, and more important, because demand growth can't push prices upward as long as it is balanced by supply growth. And the supply curve for oil--the amount offered at any given price--is being pushed steadily outward, thanks to technology.

PETRO-TREASURE. Technological advances are slashing the costs of finding, producing, and refining oil, creating a new economic calculus for the oil industry. The new alchemy runs from three-dimensional seismology to exotic wells that sit on the ocean floor, in some cases eliminating the need for billion-dollar offshore production platforms. Says Shell Oil Chief Executive Philip J. Carroll: ''Technology always drives down cost. I don't think its effect in this industry will be any different.''

Never mind the latest discord in the Middle East. Short of destroying another country's oil wells, as Iraq did to Kuwait in 1991, no nation can curtail the world supply of oil and force up its price for very long. Members of the Organization of Petroleum Exporting Countries still sit on the world's biggest and best oil reservoirs. But they can't raise prices--because if they do, non-OPEC sources will grab market share by developing fields where technology has made production affordable.

Rainwater's high-price theory notwithstanding, the end of the cold war and the spread of global capitalism aren't just adding to the demand for oil--they're adding to its supply as well. That's because more and more countries, from Venezuela to Kazakhstan, are welcoming the investment that's needed to exploit their petro-treasures.

The progress already achieved through technology is mind- boggling. The average cost per barrel of finding and producing oil has dropped about 60% in real terms over the past 10 years, while proven reserves are about 60% higher than in 1985 (charts, page 140). And these official figures far understate the amount of accessible oil in the ground. Smith Rea Energy Associates Ltd., a London-based researcher, figures that the world's oil producers could add 350 billion barrels to their proven reserves if they counted all the oil that has become affordable to recover because of the latest breakthroughs. That sum is equal to nearly 14 years' worth of worldwide consumption.

Experts have been underestimating oil reserves since 1874, when Pennsylvania's state geologist direly warned that ''the U.S. [has] enough petroleum to keep its kerosene lamps burning for only four years.'' Later experts put the date of exhaustion in the 1920s, then the 1940s. In 1972, the Club of Rome said the world had only 20 to 31 years of known oil reserves. Yet today, measured reserves are higher than ever.

Indeed, the very notion of what oil reserves are is changing. Rather than being a fixed number of barrels, the reserve is seen as something that grows and grows as technology finds new sources of oil and extracts more from existing fields. Take the giant Forties field in the British sector of the North Sea. In 1970, British Petroleum Co. rated it at 1.8 billion barrels of proven reserves. Yet by 1995, it had produced 3.6 billion barrels, and BP said 2.8 billion barrels in proven reserves remained.

The impact of such progress on crude oil prices has been dramatic. In 1980, Stanford University brought together 10 of the top oil forecasters to run their computer models. The average forecast for this year, among the six that made predictions for 1997, was $98 a barrel. Even as recently as 1991, experts were predicting the price per barrel in 1997 would be about $45.

Instead, the inflation-adjusted price of oil has fallen by two-thirds from its 1980-81 peak. Oil is cheaper than bottled water. ''Oil-price forecasters make sheep seem like independent thinkers,'' gibes Massachusetts Institute of Technology energy researcher Michael C. Lynch. ''There's no evidence that mineral prices rise over time. Technology always overwhelms depletion.''

[red-beard]

Originally Posted by gsmith660

Are you in the oil business?

We prefer to call it "The Energy Business" these days, but yes. Actually, we make compressors mostly for natural gas. Government regulation has forced most of the power plants in this country to become Natural gas, which helped triple the price in just a few years.

I don't make a nickle on the price of Natural Gas.

[equality72521]

The company I work for (major grocery store chain) has to sell $80 to make $1 profit. Think about that. The average family spends what, $120/week on groceries? So we "earn" $1.50 per week/per average family.

[nota]

Originally Posted by equality72521

The company I work for (major grocery store chain) has to sell $80 to make $1 profit. Think about that. The average family spends what, $120/week on groceries? So we "earn" $1.50 per week/per average family.

BS the 2.25 can of soup at the major grocery store is 1.54 at target
and 1.25 at big lots or about a dollar at sams club in a 6 pack
so that is just an other BIG LIE
none of the other guys are selling at less then cost
as those are every day prices

BTW the major grocery store does sell the same cans at two for one on sale
so true wholesale cost must be about 1/2 retail price
thats about $40 on an $80
sure there are other costs
BUT there are also other incomes
LIKE THE WAY THEY SELL SHELF SPACE
that you never hear about