EXXON sales $100 BILLION/Profit $8.3 BILLION! (merged)

[jetflyer]

They really aren't gouging.

There is a lack of refineries.

There were worries and still are that there will not be enough oil products for the U.S. in the near future.

The price had to go up to CAUSE people to use less.

The oil companies are GUILTY of SHUTTING DOWN over a HUNDRED refineries in the last 25 years so that they could increase refinery profits.

They are guilty of that.

Here is my source: http://www.financialsense.com/stormwatch/update.htm

The United States has experienced a steep decline in refining capacity between 1981 and the mid-1990s. The number of refineries fell from 324 in 1981 to 149 in 2003.

This is one of the major reasons the prices are so high. They wanted to maximize the use of their refineries.

I think it is criminal and has developed into a National Security issue. It has exposed a weakness in the U.S. if we enter a future war. Our adversaries would only have to target 10-20 refineries and the U.S. would BE CRUSHED. We have to build more refineries NOW.

Well now that many refineries are STILL shut down from the hurricanes, we're having trouble creating all of the GASOLINE, Jet fuel, Heating Oil, etc. that we need.

So there are shortages of these products and economics is economics. The only way to fairly distribute a product that is in short supply is to raise the price so that only those that can afford the product at that price will purchase it.


Jet

 

[GoingHot]

Say Again,

Ima gonna take the time to explain this to you.

You(insert your oil ccompany name here) own a big oil company that does and owns various things. You own coal mines, gas fields, offshore/onshore drilling rigs, as well as fractionation plants.

When the price of crude oil is $11.00/bbl the oil/gas in your fields sit there making very little money. Your offshore/onshore rigs do almost nothing(which costs you a ton of money to do nothing) and your fractionation plants produce the bare minimum.

Now, the price of oil(crude oil futures on the Mercantile Exchange) goes up to $40/bbl-$60/bbl due to investers thinking they can make money in crude oil futures(they have and can) and suddenly all your gas/oil fields are worth a whole lot more. Your offshore/onshore rigs are producing like mad, and the fractionation plants are at full output.

Now, there'd be a huge change in profit from $11/bbl to $60/bbl. "Record Profit" even.

The price at the pump is largely linked to margin. about 7-12% is pretty standard. I will say that gas(at the pump) goes up rather fast, and down rather slowly. I hate that too, but I don't own a gas satation and can't help you.

I hope this helps.

Ca1900 you Sir, are a complete moron!

Good stuff SWA GUY, but I'm afraid you're wasting your time. You can talk until you're blue in the face, and you will still get the same answer from Ca1900 and his kind: "DON"T CONFUSE ME WITH THE FACTS".

 

[Traderd]

10/28/2005
0945: Sold short 7000sh @ 56.10 XOM; 1045 covered 5000sh XOM @ 54.98
0942: Sold short 3500sh @ 98.40 VLO; 1039 covered 3500sh VLO @ 95.30

Total short term gain from my trades in the oil sector this morning are about 18K gross of fees and taxes, net of commissions.

And for the uninitiated, a short sell success means the value of the security decreased. Also, XOM is Exxon Mobile (BIG OIL!!!) and VLO is Valero (BIG REFINERY!!!). Record profits, "criminal" activity in a failure to build enough refineries and this is the shareholder's reward? Oh well, matters not in which direction stock will move, only that they move as I had similar results on 10/24 on the long side.

I have no idea why reasonably intelligent people can't see all of this economic activity involved with companies in the energy sector and utilize a small part of that intelligence to profit from the dynamics. The opportunity is out there. There may be no one to hold your hand, provide instruction and protect you from "management", but the chance to better your economic plot in life is very real. Take a minute to study the statistical implications of volume/price/range volatility instead of the time to bemoan the amount of profit a corporation has realized and maybe you will be surprised at the profit you can realize.

Back to you regularly schedule "Woe is us" thread. Just remember, you can turn lemons into lemonade (terrible cliche I know) when any commodity hits a critical level of scarcity , or at least when it is priced as such. Just remember to think, don't feel.

 

[ultrarunner]

I tanked up (hehe) on oil stock early this year, and I'm not complaining one darn bit. We are 5 years into a 20 year cycle of very active hurricaine seasons. Everyone would be wise to re-evaluate their holdings in energy stock.