Exxon Mobil 2Q Profit Jumps 36 Percent

Yep. That is what happens when price of oil skyrockets to $70/bbl. and a company is making a profit of $50/bbl. at the wellhead.

The oil industry has always been subject to booms and busts and will continue to be so. I expect the price to crash once again before this decade ends. There is lots of new production coming online in the next couple of years. And then these heady profits will be only a memory.

Latest price information:

http://quotes.ino.com/exchanges/?r=NYMEX_CL

http://quotes.ino.com/exchanges/?r=NYMEX_HU

 

Well, I certainly am glad we got that energy bill passed last year. I guess the oil industry needs all the help it can get.......

Regards,
BiR

 

A point worth noting is that $ figure is a QUARTERLY profit. Think about that.....

Regards to you and yours, LadyEagle,
BiR

 

Thanks, LadyEagle: I got a chuckle out of that.
I don't think it's a conspiracy - it's about making money...........ALOT of money.

Regards,
BiR

 

That is a flat out falsehood. Otherwise, you would offer proof. You know I wasn't going to let you get away with a silly statement like that. :flower:

But then again it may just be ignorance on your part. I find that the American people know little to nothing about economics in general and about the oil industry in particular.

 

Then, by all means, enlighten us.

 

Let's break down the numbers in the news article in the OP.

ExxonMobil's second quarter 2006 profit was 36% higher than its second quarter 2005 profit.

Upstream profits increased 46% in the second quarter 2006 versus the second quarter 2005.

Downstream profits increased 12% in the second quarter 2006 versus the second quarter 2005.

90% of the profit increase in the second quarter 2006 versus the second quarter 2005 was in the upstream side of the business at the wellhead and only 10% was in the downstream side of the business at the pump.

Which means that ExxonMobil's profit at the pump probably rose about $.004/ gallon during the second quarter of 2006 versus the second quarter of 2005 - if its sales volume was the same as last year.

Anyone who thinks that he is being gouged at the pump when the profit margin on a gallon of gasoline is $.03-.05/gallon is being just plum silly.

Look at it this way, if oil companies made no profit at all on the downstream side and simply broke even at the pump, then the price at the pump would decrease only $.03-.05/gal.

 

Govt required additives cut MPG. Alcohol cuts MPG.

 

Ken

Not bad fer a city boy. Fer a country boy that would be about average . . .

 

May 1, 2006
Windfall Profits Tax Would Hardly Be Revenue Gusher
by Jerry Taylor and Peter Van Doren ​

While the raw earnings figures sound big, in proportion to the size of those companies, they are unexceptional. Divide profits by sales, for instance, and you'll find that in the fourth quarter of 2005 (the last quarter for which we have data available), profit margins were 6.8 percent at British Petroleum, 7 percent at ConocoPhilips, 7.1 percent at Shell, 7.7 percent at Chevron and 10.7 percent at Exxon Mobil. The 20 largest investor-owned oil companies earned a collective 8.8 cents on every dollar of sales for that quarter.

Now, it's not a stretch to note that the lady who sells us hot dogs on the street probably earns a better profit margin than that. But more to the point, the nation's most prominent critic of "oil profiteering" — Fox News personality Bill O'Reilly — works for a company (News Corp.) that reported a 10.2 percent profit during the fourth quarter of 2005. If you're after really big earners, however, check out Yahoo (a 45.5 percent profit margin), Citigroup (33.4 percent), Intel (24 percent) or Apple (22.7 percent).

Returns on invested capital over a longer time frame are even more telling. Analysts at Goldman Sachs report that returns on investment capital in the oil and gas sector from 1970 to 2003 were less than the U.S. industrial average over that same period.

Although few believe it, the oil industry would have to earn record profits for a long time before it would produce above average returns for its long-term investors.

- more at www.cato.org/pub_display.php?pub_id=6370