Exxon announced it’s earnings today. Profit soared 36% to a near record $10.4 billion in the second quarter. Those earnings are second only to the $10.7 billion that Exxon made in the fourth quarter of 2005.
Can someone explain why profits keep rising when the price of oil keeps rising? Isn’t it about time that the people of this nation begin wondering a little louder on this? I don’t want Exxon to go broke, but what would happen if they cut their profits in half? How far would the price of gas have to drop for their profits to be cut in half?
[tags]Exxon Mobile, profit, record profit, exxon[/tags]
{ 3 comments… read them below or add one }
The cost to extract oil from the ground (remember, Exxon is a huge oil producer) is staying fairly constant, but demand has pushed up the revenue. So, profits go up.
Pure retailers make next to nothing on gas. Refineries fall in between.
It all comes back to supply and demand.
Hallelujah. Profit is one thing. Ridiculous abuse of the American public (with silent Senate & House members who pocket lots of Big Oil money) is another.
Bill,
Is it demand pushing up the revenue, or demand pushing up the prices? The way I see it, the oil companies see a rising demand and a limited future supply, so they decided that charging more now would give them a cushion if the reserves ever dry up. I like to think of the oil industry as a dirtier version of the diamond industry. Release all that’s available and the prices drop drastically.