How do Big Oil continue to record historic record profits ?
when there is not enough oil to sell in the US ?
compared to the 1990’s and early 2000’s when there are abundant oil to sell ?
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when there is not enough oil to sell in the US ?
compared to the 1990’s and early 2000’s when there are abundant oil to sell ?
Related posts:
They are recording record costs as well. The key number to look at is Gross Margin. That is the percent of profit relative to revenue. It is not any higher than it has ever been.
Taxing oil companies profits will only raise the cost of fuel as the increased costs would be passed on to the customer.
They don’t make any higher margin than other industries, they just move a huge volume.
There is enough oil. It is an international commodity. The major oil companies are international in scope. Trying to separate out the US from the mix is impossible.
If you have watched the news, its the speculators who drive the prices of oil up. Oil companies are paying those high prices to import oil and those that produce their own oil get that same price.
Biggest issue with oil companies, they are paying out more and more money for payroll and services so, on one hand, they are making more money, but on the other, it costs them so much more to do business.
If the American oil producers closed the oil valve for one day, you would see how much they really produce. My cousin works on a platform in the Gulf of Mexico and they pump over 80,000 barrels of oil per day to shore for refining. To drill a new well, cost them about 65 Million dollars before they pump the first drop of oil.
Would you be willing to put up 65 million not knowing how much actual oil there was and if you were going to get your investment back??? Oil companies do that every day. Besides, they make about 9-12 percent off their investment. Look at Walmart, Sears and those stores, who make about 30-40% off their investments.
Blame Congress for the last 25 years for not doing what was right for America. Blame Clinton and Bush for 16 years of not doing the right thing. Blame Americans for not demanding their elected officials do something before we hit 4 bucks per gallon.
I say fire anyone in office, cause they have not done their jobs.
not enough? I have seen no sign of a shortage, not one closed station and the only lines are at the stations with the lowest prices. as for recording huge profits, they’re taking it right out of your pocket and all we can do is say thank you for Fu@king us.
They are making a lot of dollars (I think the post write-offs income for Exxon was something like 40 billion last year–been a while since I looked at a financial statement though, so that’s a guestimate) off producing oil. That is what is driving their bottom line really.
Exxon’s refineries, however, buy half their oil of the spot market, so their refining costs are up, and that segment of their business isn’t doing so well even though they are recording record profits, so don’t expect Exxon to be in a big hurry to build any refineries.
About a third of the increase is directly related to the devaluation of the dollar, so though they are making more, what that money purchases abroad has declined, and you might be becoming familiar with this effect in your own personal life (inflation). Another third to half is probably investors seeking a safe haven in commodities or chasing these record run ups in prices (speculation). It remains to be seen how much is due to outright market manipulation.
Volume my friend. Thier GP% is still only about 8%, which quite frankly sucks.
3 parts to your question:
1) The oil markets are a global market, not solely a sector of the American economy;
2) Their record profits place them more or less in line with the average profit margin from across all sectors of the American economy;
3) Simple supply and demand economics tells you that when supply goes down or stays largely unchanged (which is what is currently happening globally) while demand shoots up (which is what is happening globally), the price of the widget being sold (in this case, oil) increases.