Thursday, May 1, 2008

Meanwhile, the Oil Companies Get Richer

What a heartbreak...

Exxon Mobil Corp., the world’s largest publicly traded oil company, said Thursday record crude prices helped its first-quarter profit climb 17 percent to $10.9 billion — the second biggest U.S. quarterly corporate profit ever.

But the results still fell short of Wall Street’s lofty forecasts, and its shares fell more than 4 percent in morning trading.

The company’s refining operations limited the company’s overall earnings growth because crude prices for crude oil rose even faster than the rise in prices that drivers see at the gasoline pump.

It's tough to make obscene profits from the misery of others.

But even at $10.9 billion, the profit ranks as the second biggest for a U.S. company — the only bigger result in a three-month period was the $11.7 billion Exxon Mobil posted in the final three months of 2007.

Ouch! That's gotta suck. And remember--this is a profit from something we don't make here. This is a profit from selling something bought somewhere else. It's a sad day when the biggest profit ever is from something that forces us to keep our troops stuck in the Middle East. It's a sad day when America doesn't make anything except for debt anymore.

Already, record crude prices have produced bountiful first-quarter profits for several of the other major oil companies, despite higher costs and lower results from refining.

BP PLC and Royal Dutch Shell PLC, Europe’s two biggest oil producers, posted combined profits of $17 billion earlier this week — $9.08 billion for Shell, $7.6 billion for BP.

BP’s earnings surged 63 percent from a year ago; Shell’s rose 25 percent.

Last week, ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. oil outfit far outpaced industry expectations.

Chevron Corp., the No. 2 U.S. oil company, is expected to continue the trend. It is scheduled to report first-quarter results Friday.

You'd think they'd feel the need to start cutting their profit margins so that consumers could keep buying their products. Don't hold your breath.

Remember when the oil company executives were called to Capitol Hill? Remember when there was a controversy about whether or not they should raise their hands and swear to tell the truth? I think we need another trip to the Hill to explain why they're making so much money when they should be making a more modest profit. Hell, by my way of thinking, these guys should be losing money or breaking even--and begging for cars that get better mileage.

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