Exxon Mobil Posts Highest US Corporate Profit Ever at $9.9B

Well you see there's this shortage, and um ah a hurricane, yeah that's it, and another hurricane...

Published on October 27, 2005 By Nadeon In Current Events

Link

Anyone else out there have a problem with this? Come on already!!!! Do they think we're morons?!

Comments (Page 1)

on Oct 27, 2005

I have no problem with this.

The country runs on oil. The whole world runs on oil. The demand for oil has been increasing every year since it first became a commodity. It's not at all surprising that the profits of the people who have gone into the business of meeting this increasing demand should increase as well.

And even though Exxon's profits keep going up, my own "

rofits"--quality of life, size of retirement fund, amount of financial assistance and nice gifts I can give to my family and friends--also keep going up. So I figure I'm definitely getting my money's worth out of all the oil I buy.

Beyond that, I can't figure out why I should care how well Exxon is doing off our business transactions. What little caring I can muster up is definitely of the "glad to hear they're profiting from our arrangement, too" variety.

As far as I can tell, Exxon doesn't owe me anything beyond the oil I've paid them for--which they've happily delivered to me. Why should I care what they do with the rest of their wealth?

Nadeon

on Oct 27, 2005

And even though Exxon's profits keep going up, my own "rofits"--quality of life, size of retirement fund, amount of financial assistance and nice gifts I can give to my family and friends--also keep going up. So I figure I'm definitely getting my money's worth out of all the oil I buy.

Tell me the same after a long cold winter of increased energy costs.

Beyond that, I can't figure out why I should care how well Exxon is doing off our business transactions. What little caring I can muster up is definitely of the "glad to hear they're profiting from our arrangement, too" variety.

I could buy that pie in the sky line too if there were alternatives to have "transactions" with.

The country runs on oil. The whole world runs on oil. The demand for oil has been increasing every year since it first became a commodity. It's not at all surprising that the profits of the people who have gone into the business of meeting this increasing demand should increase as well.

I have a problem with profiteering to the point of causing hardship to the very people they "transact" with. Of course we buy it. It's not like we have our choice of grocery stores to select from. I also have a problem with manufactured circumstances that conveniently raise the speculation on their "product". I'm not an economics major, but I do know profits don't go up dramatically (75% check the link) if you have increased investment in development and production. That would explain increases at the pump. I understand supply and demand, but supply doesn't seem to be an issue, does demand alone account for such obscene profits?

Although I think you're an ostrich, I do appreciate your contribution.

Dr Guy

on Oct 27, 2005

Gas went up to $3 a gallon. Did you cut back? how much? The supply was cut, it is now coming back on line. Yes they made big profits. But they would not have if you did not continue to buy it.

stutefish

on Oct 27, 2005

In reality, I think the issue is a lot more complicated than "they made huge profts, they must be evil!".

I'm not an ostrich. I just don't have a problem with Exxon charging as much as the market will bear. Its our world, not theirs. They're actually playing by our rules. They just happen to be playing very well.

Larry Kuperman

on Oct 27, 2005

Most of my driving is to work and back. Cutting down is not an option.

The rise in gas prices occured after Hurricane Katrina, in response to reduced supply...or so we have been told. But Exxon Mobil was not the only oil company to post record profits. If the Big Oil companies acted in collusion to artificially raise prices, that is illegal. Moreover it is against American interests.

Check out Bill Frist's comments today: "If there are those who abuse the free enterprise system to advantage themselves and their businesses at the expense of all Americans, they ought to be exposed, and they ought to be ashamed." Bill Frist is the Senate Majority Leader. He is not anti-business by any means, but he is right on target with his remarks today and his call for Senate hearings on the matter.

He continued "We need to increase refinement capacity, provide more energy resources, encourage conservation, invest in science and technology, and, most importantly, transition towards energy independence, including the use of more alternative fuels."

Something that most people are also not aware of. The loss off oil rigs off the Louisiana coast was, in the most part, covered by insurance.

America as a country suffered a severe blow. It is an obligation of all Americans to pull together for recovery.

citahellion

on Oct 27, 2005

Of course we buy it.

Yeah, because you certainly have no control over how much of it you use.

It's not like we have our choice of grocery stores to select from.

Everyone knows BP and Amoco and Phillips and SuperAmerica and Sinclair and Holiday and Marathon are all just brand names that Exxon uses to spread their presence around, after all.

Come on. Look at their lines of business. Exxon doesn't make ALL its money from what you pay at the pump every week. In fact, I'd be willing to bet that a majority of their income comes from selling crude oil by the barrel. Which, I'm sure you'll recall, is also at an all-time high price.
Also, if they're being encouraged to build new refining capacity somewhere (which they are, although good luck finding an actual place to do it), that'll probably cost them at least $1 billion by the time all's said and done (licenses, fees, approvals, rezonings, battles with the NIMBY crowd, etc).

Dr Guy

on Oct 27, 2005

Everyone knows BP and Amoco and Phillips and SuperAmerica and Sinclair and Holiday and Marathon are all just brand names that Exxon uses to spread their presence around, after all.

I like your sarcasm!

And you make good points!

Lee1776

on Oct 27, 2005

Also, if they're being encouraged to build new refining capacity somewhere (which they are, although good luck finding an actual place to do it), that'll probably cost them at least $1 billion by the time all's said and done (licenses, fees, approvals, rezonings, battles with the NIMBY crowd, etc).

That is just it, the Federal government has enacted a few acts recently that will make building refineries easier, regulation wise. (i.e. on federal lands ect..) If it cost one billion when all it is said and done, then that would take only one out of 9 billion in profits.

The oil companies do not want to build anymore refineries, because to do so would cause prices to drop. It is simple economics to produce less and make higher prices per gallon. If they produce more and made less per gallon they would have to pay the overhead cost of manufacturing each gallon. So bulk sale and production is not beneficial to them. With so little competition, there is no incentive from there either. The supply and demand system does not work when the competition is just as willing to not produce more.

The oil companies need to start investing the profits in R&D for other sources of energy. To do so make them look a lot less like money grubbing trolls and insure profits beyond the supply of oil. The oil industries problem is that they should have spent the money earned during this years high prices on anything, so as to deflect the criticism and regulations that will be enacted by Congress in the next few years.

I personally don’t like the federal government regulating any industry, but if the oil production industry continues their massive profits, they may fined themselves on a receiving end of near socialist regulations pushed through Congress with public support. Whether they like it or not.

Slanderer

on Oct 27, 2005

I have no problem with this either.

Anyone who has spent time evaluating Exxon knows this rate was accomplished with a 9% percent profit margin. Some of the other companies hover around 10-12%. That's far less than google or just about any tech stock. We know the rise in price was not a return to the '73 price gouging but an increase in demand.

Also note that Katina has still knocked out over 50% of the capacity to refine crude and is not expected to return to normal until next year. A windfall profits tax will not solve the refining problem. Nor will stopping any development of another plant being built in the midwest. Remember the last plant was built in this country in 1973 and usage has gone up since then.

Dr Guy

on Oct 27, 2005

Also note that Katina has still knocked out over 50% of the capacity to refine crude and is not expected to return to normal until next year. A windfall profits tax will not solve the refining problem. Nor will stopping any development of another plant being built in the midwest. Remember the last plant was built in this country in 1973 and usage has gone up since then.

Since when did you become conservative?

Excellent points.

Larry Kuperman

on Oct 27, 2005

Not to be argumentative and perhaps I should have linked to this article on CNN: http://money.cnn.com/2005/10/27/news/senate_oil.reut/index.htm, but Senators from both parties felt that there was enough of an issue here to convene hearings.

I quoted Bill Frist's comments earlier. Frist further said "I have asked them to call as witnesses executives from the major oil companies and representatives of the state attorneys general, who have the initial responsibility of keeping the behavior of local energy providers on the straight and narrow."

There is at least enough reason for the hearings to be called.

eieio

on Oct 28, 2005

The oil companies do not want to build anymore refineries

I don't really buy that. That's like saying Walmart doesn't want to open more stores.

Of course they want to build more refineries, more product means more sales, which means more profit.

As a side note: Interesting how profit has come to be a bad thing in some people's eyes.

Dr Guy

on Oct 28, 2005

As a side note: Interesting how profit has come to be a bad thing in some people's eyes.

The sad note is they would not be getting those profits if the people decrying them did not keep buying their products.

DJBandit

on Oct 28, 2005

I don't believe that's a good comparison. You see, Walmart is know for selling really cheap products at really cheap prices. People go to Walmart to buy a lot of unnecesary products. On the other hand Oil is a big necesity in todays society. People can't barely get around from point a to point be without gas. Whether it's in a car, on a bus,a boat, a train or an airplane gas is a must. For some companies oil is needed to run machines to make new products. Oil is used to hear up homes, to create electricity.

You see, while buying that unnecesary neat product to make your bacon in the microwave or that new Star Wars Episode 3 movie or that spindle of DVDs or those photo printing machines at Walmart. In the end you still need that tank of gas in you vehicle to get there and to take that all with you.

So while you may not always need to buy those products everyday from Walmart, they make sure there is a store close buy just in case you feel the need to spend money on unnecesay items. So it makes sense to have a store a few miles away from each other. On the other hand Gas Stations need not to make an effort to get you to buy their product cause as soon as your car begins to flash the "Low Fuel" light you will head to one even if you can't see it.

In other words it's not the same to convince a person to buy a product they don't need then to wait for people to come flocking to you for a product they can't live without.

ParaTed2k

on Oct 28, 2005

Power to the Profits, they fuel the economy!!!

Why do companies that use fuel complain about high fuel prices? It cuts into their profits. Why are we supposed to feel bad that the trucking company, salesman, taxi or even airline is losing profit margin because of high fuel prices, while at the same time we're supposed to hate the oil companies for making profits?

A lot of factors have gone into the high fuel prices, some legitimate, some not... Maybe we are just seeing the natural result of what happens when government stifles progress in an industry to the point that it is forced to continue doing things the same way for 40 years. Since no new refineries have been built, very little new technology has gone into the way gasoline (and other petroleum products) are produced.

Whatever your job is, think of what it would be like you if were forced to do it pretty much the same way it was done in the 70s. Think of doing much of what you do using 70s technology and prodecures... then come tell me how great it is that the government has such a stranglehold on fuel production.

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