http://money.cnn.com/2008/10/30/news/companies/exxon_earnings/index.htm

Quote :

"NEW YORK (CNNMoney.com) -- Exxon Mobil Corp. set a quarterly profit record for a U.S. company Thursday, surging past analyst estimates. Exxon Mobil (XOM, Fortune 500), the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, or $2.86 per share, up from $9.41 billion, or $1.70, a year earlier. That profit included $1.45 billion in special items. The company's prior record was $11.68 billion in the second quarter of 2008. The latest quarter's net income equaled $1,865.69 per second, nearly $400 a second more than the prior mark. The company said its revenue totaled $137.7 billion in the third quarter. Analysts had expected Exxon to report a 40% jump in earnings to $2.38 per share, or net income of $12.2 billion, and a 28% surge in revenue to $131.13 billion, according to a consensus of estimates compiled by Thomson Reuters."

Seriously, fuck the oil companies. Fuck them in the ass.

10/30/2008 11:06:04 AM

Why all the hate? They don't set the price of oil, and they sure as hell aren't the ones restricting supply.

Don't worry, they'll be struggling over the next few years as oil prices drop below $50 a barrel.

10/30/2008 11:08:52 AM

i hate people who make money, rawr, give money to me cause that would be fair, blah blah

10/30/2008 11:09:18 AM

Yeah man, fuck American citizens. I enjoy paying out the ass for fuel prices. I guess there was a reason for the high prices, right? I mean, they must be JUST BARELY making even if they have to raise prices so high!

Oh wait, nevermind, they actually made record profits.

Quote :

"They don't set the price of oil"

IF THE PRICE OF OIL WAS REALLY A HIGH COST TO THEM, THEY WOULDN'T HAVE MADE RECORD PROFITS NOW WOULD THEY?!

Let's make an analogy for you. Let's say I own a store that sells apples.

Normally, I purchase the apples for $1, and then I sell them to you for $3. This means I make a profit of $2 per apple.

Now, let's say you come in one day and you see that the price of apples are $6. You say to me, "Sir, what happened to make your prices so high?"

"The prices of apples went up, my friend. I have to raise prices to compensate!"

So, you would assume that I would only raise the price to keep my profits the same. If I usually made a profit of $2 per apple, this must mean that the cost of apples for me is now $4, which would explain why I am selling them for $6. This would still get me the same profit of $2 per apple.

Now, let's say you find out that no, I didn't make a profit of $2 per apple this quarter. In fact, I made a profit of $3.50 per apple. I had record profits! I used the crisis as an excuse to raise my prices to an exorbitantly high amount and make you pay more than you needed to.

[Edited on October 30, 2008 at 11:19 AM. Reason : ]

10/30/2008 11:13:43 AM

So, let's see. Americans buy "record amounts" of gas, but then somehow it's inexplicable that oil companies make "record amounts" of profits.

It must be price gouging! Those evil, evil oil companies, making a product that despite all my complaining about the price, I still won't adjust my lifestyle to buy any less of!

10/30/2008 11:16:07 AM

Not just a profit, guys. QUARTERLY RECORD profit.

Them having no influence on the price of their product or how much they make is complete bullshit.

10/30/2008 11:17:51 AM

Quote :

"they must be JUST BARELY making even if they have to raise prices so high!"

thats the point of business...to barely break even...yep....lets all break even and be on welfare

i get a kick out of threads that are based on the premise of "i am envious and jealous as fuck of this person/company because they have more money/power than i do...thats not fair...whine cry whine"

[Edited on October 30, 2008 at 11:20 AM. Reason : .]

10/30/2008 11:18:34 AM

I just want to get on the record as saying that I have no problem with oil companies bringing in record profits. If Americans want to see those numbers go down, they will look for/invest in alternatives or decrease the amount of gas they use overall. I've made several personal changes that have really cut down on the amount of money I give to the oil companies.

10/30/2008 11:19:47 AM

Quote :

"So, let's see. Americans buy "record amounts" of gas,"

Uh, actually this summer was the lowest driving season in recent history, but have fun with your factoids.

10/30/2008 11:22:26 AM

Actually, all you crazy conservatives, their production was down as was consumption. So they were, in fact, making more per unit of oil produced than they were when the price of oil was lower.

For the record, I'm not hating on them. They're a company whose goal is to make as much money as possible. I'm not happy about it, but they're playing by the rules. I just had to point out that yall are wrong... again.

10/30/2008 11:24:09 AM

^^^ *ding*ding*ding*ding*ding*

We have a winner. In the market of competitive commerce prices are set by the interaction of buyers and sellers. While oil is an inelastic good in the short term, long term structural changes will reduce our dependence on it.


That being said, I'm not naive enough to believe that the fact that two oil men are running the White House, and the fact that the federal agency which regulates oil is apparently corrupt from the top down ( http://www.cnn.com/2008/US/10/14/oil.whistleblower/index.html ) has nothing to do with the current price of oil.

10/30/2008 11:24:20 AM

Quote :

"thats the point of business...to barely break even...yep...."

ummm, yeah, actually that is the point of a perfectly competitive industry

10/30/2008 11:24:35 AM

that business is not hurting because the multi-decade global growth story is in tact, and energy prices will remain relatively high as a result.

Quote :

"They don't set the price of oil, "

this is predicated on the assumption that these companies do not have influence on US policymakers, and in turn the US does not subsidize cheap oil (subsidies = long term military presence in the middle east), by having influence on major oil producing countries.

omfg a conspiracy! - no not really - this is the way the world works.

Quote :

"and they sure as hell aren't the ones restricting supply."

with regards to offshore drilling, ANWR, and other frontiers in our own territories, access should be granted at a high cost. the amount of $ collected in that cost should be directed to developing green technologies, primarily solar & wind.

10/30/2008 11:27:44 AM

Also, here's my citation for my earlier post:

http://www.fhwa.dot.gov/pressroom/fhwa0817.htm

Quote :

"WASHINGTON – New data released today by the U.S. Department of Transportation show that, since last November, Americans have driven 53.2 billion miles less than they did over the same period a year earlier – topping the 1970s' total decline of 49.3 billion miles. "We can't afford to continue pinning our transportation network's future to the gas tax," said U.S. Transportation Secretary Mary E. Peters. "Advances in higher fuel-efficiency vehicles and alternative fuels are making the gas tax an even less sustainable support for funding roads, bridges and transit systems." Americans drove 4.7 percent less, or 12.2 billion miles fewer, in June 2008 than June 2007. The decline is most evident in rural travel, which has fallen by 4 percent – compared to the 1.2 percent decline in urban miles traveled – since the trend began last November. Last month, Secretary Peters unveiled the USDOT's transportation reform plan which offers lawmakers several options to consider when Congress takes up highway and transit legislation next year. "It really makes little sense to try to upgrade our infrastructure using a revenue source as ineffective, unsustainable and unpopular as the fuel tax," she added. "Secretary Peters' plan to overhaul our nation's transportation investment strategy begins the much-needed transition away from status quo solutions that produce status quo results. Her plan strengthens the abilities of state and local officials to integrate effective transit and highway solutions to meet Americans' ever-changing travel demands," said Acting Federal Highway Administrator Jim Ray. As Americans drive fewer miles, less revenue is generated for the Highway Trust Fund from gasoline and diesel sales – 18.4 cents per gallon and 24.4 cents per gallon, respectively. During the first quarter of 2008, motorists consumed nearly 400 million fewer gallons of gasoline, or about 1.3 percent less than during the same period in 2007, and 7 percent less – or 318 million gallons – of diesel."

10/30/2008 11:28:06 AM

Quote :

"Uh, actually this summer was the lowest driving season in recent history, but have fun with your factoids."

Yeah, because the fact that we still consume historically high levels of gasoline has nothing to do with high profits. Nothing at all.

http://tonto.eia.doe.gov/dnav/pet/hist/mtpupus1m.htm

Or, even better:

http://tonto.eia.doe.gov/dnav/pet/hist/MGFUPUS1m.htm

What you're describing as the "lowest on recent record" isn't exactly a tremendous drop, here.

Meanwhile, let's ignore global demand too. It must be price gouging!

[Edited on October 30, 2008 at 11:35 AM. Reason : .]

10/30/2008 11:31:54 AM

^Hi, fucking idiot, let me introduce you to the article in the OP:

Quote :

"Despite the surge in profit, Exxon said oil production was down 8% in the third quarter, compared to the same period last year."

So, demand down, record profits. Explain that one.

10/30/2008 11:35:03 AM

^ and ^^

Oil companies profits come from well head prices rather than pump prices.

The story in breif, refinining, distributing and marketing gasoline is at best a zero profit business. In many cases it seems that money is even lost here.

Most profits come from extraction, pulling the oil out of the ground. The oil companies have lease contracts which specify some amount they will pay for the oil they extract. Often this royality comes in the form of a percentage of the futures market price.

The difference between the royality and the futures price is profit for the oil company. So higher prices mean higher profits, actually regardless of whether people drive or not. However, it is difficult to see how you can increase demand for oil substantially without increasing the demand for gasoline.


[Edited on October 30, 2008 at 11:37 AM. Reason : .]

10/30/2008 11:35:24 AM

Where do you get this shit that the oil companies are raising prices? Honestly, how hard is it to understand supply and demand?

Oil is a publicly-traded commodity. If supply is relatively inelastic in the short term (which it is), then the price of a barrel of oil is almost purely a function of demand. The operating costs, extraction costs, equipment, etc DON'T MATTER. The profit they make is the difference between those extraction costs and the price the oil sells for, and it's largely out of Exxon's control. You act like Exxon just arbitrarily decided to raise their prices at the pump, while conveniently ignoring the fact that they have nowhere near the kind of market share necessary to get away with any type of price-gouging.

take a fucking economics class, for crissakes.

[Edited on October 30, 2008 at 11:38 AM. Reason : 2]

10/30/2008 11:36:15 AM

^^^ efficiencies of scale, tight management of supply chain, tempered bonuses in overhead staff, sensible dividend payouts, etc.

[Edited on October 30, 2008 at 11:37 AM. Reason : ]

10/30/2008 11:36:40 AM

Man, I can't wait until all of this wealth trickles down to me in the form of cheaper gas and better qualit

*opens mouth, receives piss*

10/30/2008 11:38:50 AM

And McCain wants to give them a tax cut.

10/30/2008 11:39:21 AM

Quote :

"^Hi, fucking idiot, let me introduce you to the article in the OP: ... So, demand down, record profits. Explain that one."

You're not exactly in the position to call anyone a "fucking idiot" around here.

From your own article:

Quote :

"The company's earnings were buoyed by oil prices, which reached record highs in the quarter before declining. Oil prices were trading at $140.97 a barrel at the beginning of the third quarter, and had fallen to $100.64 at the end."

Last I checked, oil prices were a global commodity price, not one set by the individual oil companies.

But let's blame the evil oil companies anyways.

10/30/2008 11:39:29 AM

^^McCain wants to give all businesses a tax cut as an economic stimulus measure.

Don't repeat that bullshit about 300 million in tax breaks for oil companies. His tax plan includes all businesses.

[Edited on October 30, 2008 at 11:40 AM. Reason : 2]

10/30/2008 11:40:25 AM

*including oil companies

10/30/2008 11:40:58 AM

Do you think we should target specific industries and tax them more? Pigovian taxes perhaps?

10/30/2008 11:42:04 AM

Man, I can't wait until all of this wealth trickles down to me in the form of cheaper gas and better qualit

*opens mouth, receives piss*

10/30/2008 11:43:23 AM

There's the brilliant retort we expect from such a sparkling intellect such as yours.

10/30/2008 11:43:56 AM

I wonder if anyone could find a graph of the price of oil vs. the price of gasoline? That might help prove whether they're gouging us.

10/30/2008 11:46:54 AM

the ultimate fix to high prices, is high prices.

a lot of the powerbrokers out there learned that this summer was a tipping point, and there was real demand destruction in the American consumer.

furthermore, its lit a small fire that threatens to spread wild, and make those who profit from conserving the current way of doing business, lose a lot of value in the long run. there is real movement already underway in making free energy a practical reality (free energy = solar, wind, etc). you've got everyone from T Boone Pickens to the Chinese and German governments calling for, and more importantly funding, this movement.

this has caused a lot of strife within opec, even to the point of countries cheating on their quotas. the crack dealers will be learning the hard way that when everyone's a junkie, while they're still stacking piles of cash, the system has become unsustainable. pretty soon you have junkies robbing and killing each other for the crack, and you've destroyed real demand for your product. not even the crack dealers want to see that happen.

10/30/2008 11:50:18 AM

^^ From EIA:




http://tonto.eia.doe.gov/dnav/pet/hist/mg_tt_usw.htm
http://tonto.eia.doe.gov/dnav/pet/hist/wtotusaw.htm

It's a start, at least, for what you're asking for.

[Edited on October 30, 2008 at 11:52 AM. Reason : .]

10/30/2008 11:50:26 AM

They've been investigated countless times, by this congress and others. No evidence of gouging has ever turned up.

OPEC is the group that is doing the price-fixing. They are the only group large enough to really manipulate global oil prices. The "Big 5" US oil companies produce less than 10% of global oil, so they don't have enough clout.

[Edited on October 30, 2008 at 11:53 AM. Reason : 2]

10/30/2008 11:53:05 AM

I bet that $14.83 billion will create so many new jobs!

10/30/2008 11:56:58 AM

Yeah, they're really not gouging prices. If you compare the price of oil to the price of gasoline, it's pretty much the same for similar prices of oil at different times. The only difference is whether the general trend of oil is going up or going down affecting +/- less than a $.10 difference in the price of a gallon of gas.

That still doesn't change the fact that they made more profit per unit of oil they produced, but that's to be expected with a rise in the price of oil. They're going to be in some dire straits these next couple quarters as all these expensive wells they've been tapping become unprofitable.

10/30/2008 12:01:30 PM

Quote :

"They're going to be in some dire straits these next couple quarters as all these expensive wells they've been tapping become unprofitable."

Exactly. Oil is a very volatile industry. Nobody was bitching when Exxon and others were losing billions back in the early 90's.

10/30/2008 12:06:10 PM

Quote :

"Yeah man, fuck American citizens. I enjoy paying out the ass for fuel prices. I guess there was a reason for the high prices, right?"

europe's been paying up to 4-5 times as much more for gasoline than here for over 2 decades


we are spoiled when it comes to gas prices

10/30/2008 12:21:02 PM

I'd have no problems paying higher prices if I had evidence that the oil companies were hurting just as much as everyone else.

10/30/2008 12:23:04 PM

^Why would the oil companies be expected to hurt in times like these? The smart ones invested in oil exploration and development back when there was little profit in it, and now they are reaping the benefits. Why so jealous?

^^Yeah, they also have better and more advanced mass-transit systems, more fuel-efficient cars, and they pollute less.

Coincidence? I think not.

[Edited on October 30, 2008 at 12:25 PM. Reason : 2]

10/30/2008 12:23:44 PM

they all drive mopeds and smart cars, and thus less pollution

they have learned how to get by, and we are just starting to realize this

10/30/2008 12:25:30 PM

Yeah, in the grand scheme of things, it's incredibly wasteful and inefficient to drive everywhere in a 5000 lb SUV with 350 horsepower and 15 mpg when a 60 lb moped with 20 horsepower and over 100 mpg can get you where you need to go just as easily, and without the parking headaches.

10/30/2008 12:28:50 PM

for the love of God don't compare the US to Europe. Its not even close to the same story transportation-wise, apples to oranges. Just stop it!

God, just admit you're a fucking commie and move along.

10/30/2008 12:49:33 PM

Quote :

"Gas under $2 in Charlotte area"

http://www.charlotteobserver.com/104/story/289367.html

10/30/2008 6:35:22 PM

Bring on the short term memory retards to buy their SUVs again and then scream how they need to drill more. . .

10/30/2008 6:57:41 PM

its really not fair till you look at what they spend to make that money and look at profit margins

10/30/2008 7:00:13 PM

Quote :

"IF THE PRICE OF OIL WAS REALLY A HIGH COST TO THEM, THEY WOULDN'T HAVE MADE RECORD PROFITS NOW WOULD THEY?! Let's make an analogy for you. Let's say I own a store that sells apples. Normally, I purchase the apples for $1, and then I sell them to you for $3. This means I make a profit of $2 per apple. Now, let's say you come in one day and you see that the price of apples are $6. You say to me, "Sir, what happened to make your prices so high?" "The prices of apples went up, my friend. I have to raise prices to compensate!" So, you would assume that I would only raise the price to keep my profits the same. If I usually made a profit of $2 per apple, this must mean that the cost of apples for me is now $4, which would explain why I am selling them for $6. This would still get me the same profit of $2 per apple. Now, let's say you find out that no, I didn't make a profit of $2 per apple this quarter. In fact, I made a profit of $3.50 per apple. I had record profits! I used the crisis as an excuse to raise my prices to an exorbitantly high amount and make you pay more than you needed to. "

Your whole argument falls apart once you realize that profits are calculated on a percentage, not an absolute dollar amount. That is, your apple salesman doesn't say "I'm going to make $Y for every apple I sell", he says "I'm going to make a profit of X percent". So in your starting case, the actual cost of the apple is $1, and the profits are $2. To keep in line with the percentages, if the cost of apples went to $2, then the profits should be $4. So, if your salesman is selling $6 apples and only taking home $3.50, not only did he not use the excuse of increasing prices to make you pay an exorbitantly high amount, but he actually was making a smaller profit than if the prices had remained where they were.

Now, you could argue that it's still unfair, that if making $2 per apple was enough profit before, it should be enough now, but that ignores the fact that if your costs of doing business are going up, chances are, the costs of other things are going up too, so that $2 doesn't go as far as it used to.

10/30/2008 8:57:36 PM

Quote :

" They don't set the price of oil, and they sure as hell aren't the ones restricting supply."

They don't directly set the prices, but it's naive to think they also aren't dipping their fingers in to the speculator community. It would be foolish of them NOT to do this. When stories like this leak out: http://www.cbsnews.com/stories/2008/09/10/national/main4436263.shtml Of the oils companies LITERALLY whoring themselves, it should make you wonder what other things are going on behind the scenes.

10/30/2008 9:06:18 PM

Quote :

"God: Let's make an analogy for you. Let's say I own a store that sells apples. Normally, I purchase the apples for $1, and then I sell them to you for $3. This means I make a profit of $2 per apple. Now, let's say you come in one day and you see that the price of apples are $6. You say to me, "Sir, what happened to make your prices so high?" "The prices of apples went up, my friend. I have to raise prices to compensate!" So, you would assume that I would only raise the price to keep my profits the same. If I usually made a profit of $2 per apple, this must mean that the cost of apples for me is now $4, which would explain why I am selling them for $6. This would still get me the same profit of $2 per apple. Now, let's say you find out that no, I didn't make a profit of $2 per apple this quarter. In fact, I made a profit of $3.50 per apple. I had record profits! I used the crisis as an excuse to raise my prices to an exorbitantly high amount and make you pay more than you needed to."

Market prices are determined by the interaction of consumers and producers. Prices can rise via the producers if production costs increase or if producers leave the market. Prices can rise via the consumers if consumer demand increases.

In your example, you have no problem with the price adjustment to reflect increased production costs. Your reasoning is that the producer's absolute profit per unit doesn't change, so nothing fishy is happening (although I would remind you that the thoughtful producer would be more mindful of profit margin).

However, you do have a problem when the price adjustment reflects something besides increased production costs. First, let's assume the price adjustment reflects increased consumer demand. In this case, you seem to argue that producers should not accept higher prices because it would increase their profits. However, assuming the factors of production constant, if producers offer the same price, then the quantity demanded will be greater than the supply (i.e. shortage). Thus, they can either choose to ration or to set a higher price. Since businesses seek to maximize profits, they would wisely choose to set a higher price. In doing so, profit margins would increase.

You declare this a problem, but that is because your analysis stops at that point. The increased profit margins would signal more producers to enter the market, which would in turn lower prices and profit margins. Producers would continue to enter the market until the profit margins reflected the risks of doing business and opportunity costs of gaining profits in other markets.

Now, let's assume the price adjustment reflects producers leaving the market. Producers would likely be leaving the market to pursue greater profits in other markets. Producers would continue to leave the market until the profit margins reflected the same issues as above. This in itself should not present a problem, because if producers are leaving the apple market for greater profits in another market, then you should be complaining first about the high profit margins in that other market.

However, if specific producers leave the market because other producers are being subsidized/benefited by government, then you can rightly complain about increased profit margins. The same complaint is justified if a market with high profit margins exists and new producers do not enter the market because they will not receive government subsidies or because the government restricts them from entering. This particular type of government intervention occurs with oil companies, and many above have pointed out such corruption and favoritism.

Thus, you should be careful not to confuse your hatred of high profit margins in a dynamic free economy with a hatred of high profit margins enabled by government intervention, as the former are corrected over time and the latter are restricted from correction. Mises' essay Profit and Loss is good on the general purpose of profits: http://mises.org/books/profitloss.pdf

10/30/2008 10:42:58 PM

i really hate little conservative douches who love it when companies many a profit by fucking Americans in the ass.

Have fun making 90k a year and buying foreign cars treetwista

10/30/2008 10:44:22 PM

i really love little liberal douches who hate it when businesses are successful

have fun always blaming somebody else for any problems you might have

10/30/2008 11:42:08 PM

God, I own an apple orchard and grow apples, which I then sell in the city. Upon arriving in the city the grocer tells me he will pay me $4 instead of last year's $2 because he knows I can get the same down the street. Did I do this to him? No, it was OAEC, the organization of apple exporting countries which restricted the supply of apples. But should I demand the grocer pay me only $2 to avoid setting record profits?

10/31/2008 12:18:55 AM

^^ I'm happy the coffee shop on my corner makes really good muffins and hasn't gone out of businesses and hasn't been turned into a Chase branch.

ha and I just got fired on wednesday. lifes a bitch and I have no one to blame except maybe the fact the company I worked for made a silly product which wasnt selling.

Its just disappointing when people like you TreeTwista automatically assuming anyone who is upset with stories such as this is a flag burning liberal. I like it when businesses are successful and Im a fan of capitalism.

but whatever. You enjoy living in Charlotte so you must have a hole for a soul.

10/31/2008 8:46:43 AM