Comments on: In the news… Exxon-Mobil profits

By: Miah

Miah — Mon, 30 Nov -0001 00:00:00 +0000

Everyone should just ride bikes, like me. Of course to do this would require a serious redesign and implementation of every city in the US (beaucoup bucks, maybe we can get exon to chip in, even if it is funding their own demise), not to mention a major paradigm shift for every American citizen. On a side note, do you have any idea about the oil spending habits of other nations? Are we alone in our constant consumption, or is the rest of the world as hooked?

By: Mary Mack

Mary Mack — Mon, 30 Nov -0001 00:00:00 +0000

Just want to be one of the first to congratulate you on an interesting site.

By: Dave

Dave — Mon, 30 Nov -0001 00:00:00 +0000

One factor in the profits is that the oil industry has successfully implemented its strategy of reducing supply of refined gasoline, made more acute by the storm disruptions. In the early 90s refinery margins were too low so the industry decided to reduce capacity to increase margin.

I'd say they have every right to manage their business to be profitable, but what bugs me is they use environmental regulations as an excuse for current refinery capacity shortage ("it's too expensive and difficult to get new refineries online"). That's disingenuous.

Also, all the mergers in the 90s have reduced competition so that active collusion isn't even needed in a lot of areas to control price.

One source:
http://www.congress.org/con...

By: Mark Mason

Mark Mason — Mon, 30 Nov -0001 00:00:00 +0000

Is it possible that the "why" behind high profits is simply that the oil companies are marking up their product by a percentage of raw material costs? I think gallon of gas at the pump has always cost about 2.5x the cost of a gallon of oil.

Since refining and distribution costs are fixed, they make more money when oil goes up?