ExxonMobil posted record profits

wendybeth · 11-09-2005, 10:15 AM

Quote:

Originally Posted by scaeagles

Well, today, the congressional hearings start on these evil money grubbing pirating profiteering oil companies.

Interestingly, does anyone know what Microsoft made in the 3rd quarter of 2005? $3.1 billion in profit. This is just about the profit posted by Conoco Phillips. There is one major difference, however.

Who sets the prices of Microsoft products? Well, that would be Microsoft. No one else. There is no software commodity market. Microsoft says "here's the product, here's the price, take it or leave it.".

I would offer that with the tremendous amount of computer technology that is integrated throughout every ounce of our existance, from the internet to operating systems to software to whatever, that it is just as important to our economy and daily life of citizens as is oil.

However, the commodities market sets the price for oil. Speculation. Fears of natural disaster. Etc.

I wonder how long it will be until Bill Gates is called before Senate committees to justify the gouging going on. I wonder how long it will be until Microsoft is subjected to a "windfall profits tax".

We have alternatives to Microsoft, don't we?

I almost feel sorry for those poor oil company executives! Nearly as sorry as I feel for the Enron guys, and the Worldcom people, and all the others that have been found guilty of market manipulation, stock fraud, insider trading, etc. I'm sure the oil industry wouldn't do such things!

Alex · 11-09-2005, 10:52 AM

I have no idea whether the oil companies have manipulated the markets. If they have, then they should be punished.

That said, the market explanations for the profits doesn't seem that out of line. Not that the executives are sympathetic figures, but as one of them said this morning, the profit margin is the same as the average of all U.S. industry, it is just that they are such a bloody huge industry.

The oil business is historically a low margin one and as another said, where were all the people in the mid-80s when the industry was losing money hand over fist? Oil production (and these are numbers I'm looking up so the math I do may be wrong) is around 85 million barrels a day.

Or 7.82 billion barrels a quarter. The top five oil companies reported a combined quarterly profit of $32.8 billion for the 92-day third quarter (per the San Jose Mercury-News article I just looked at. I don't know what the oil production market share for teh top five companies is but I feel somewhat confident in guessing that it is more than 80% and less than 100%, which means that at this range the profit per barrel would be somewhere between $4.19 and $5.24 per $60+ barrel.

That's just back-of-the-enevelope but doesn't seem horribly unreasonable to me, especially when both ends of the political spectrum have long espoused ideas that would argue that both prices and profits should surge in the short term.

But if they have been manipulating then nail them to the wall.

scaeagles · 11-09-2005, 11:19 AM

Quote:

Originally Posted by wendybeth

We have alternatives to Microsoft, don't we?

Last I checked we had electric cars and cars that run on CNG (compressed natural gas), too. Both of those are about as widely used as, say, Apple computers.

wendybeth · 11-09-2005, 11:38 AM

Lol- be serious, Scaeagles. Those electric cars are about as dependable as Windows- they stall and simply shut down constantly, and are not a practical mode of transportation, let alone the cost factor.

Alex · 11-09-2005, 11:43 AM

That said, people do have alternatives to gasoline consumption. Also, I've had this windows box on now for almost two months without crash or failure. Lani's Powerbook crashed last night.

And I drive a hybrid (one of the ones geared towards fuel efficiency not power). And I don't have a problem with gas prices going up to $10/gallon if the people who have the gas want to charge that much for it and the people who want the gas keep buying it.

And the sky is purple in my world.

11-09-2005, 10:52 AM	#2
Alex . Join Date: Feb 2005 Posts: 13,354	I have no idea whether the oil companies have manipulated the markets. If they have, then they should be punished. That said, the market explanations for the profits doesn't seem that out of line. Not that the executives are sympathetic figures, but as one of them said this morning, the profit margin is the same as the average of all U.S. industry, it is just that they are such a bloody huge industry. The oil business is historically a low margin one and as another said, where were all the people in the mid-80s when the industry was losing money hand over fist? Oil production (and these are numbers I'm looking up so the math I do may be wrong) is around 85 million barrels a day. Or 7.82 billion barrels a quarter. The top five oil companies reported a combined quarterly profit of $32.8 billion for the 92-day third quarter (per the San Jose Mercury-News article I just looked at. I don't know what the oil production market share for teh top five companies is but I feel somewhat confident in guessing that it is more than 80% and less than 100%, which means that at this range the profit per barrel would be somewhere between $4.19 and $5.24 per $60+ barrel. That's just back-of-the-enevelope but doesn't seem horribly unreasonable to me, especially when both ends of the political spectrum have long espoused ideas that would argue that both prices and profits should surge in the short term. But if they have been manipulating then nail them to the wall.
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11-09-2005, 11:38 AM	#4
wendybeth Nevermind Join Date: Jan 2005 Posts: 7,847	Lol- be serious, Scaeagles. Those electric cars are about as dependable as Windows- they stall and simply shut down constantly, and are not a practical mode of transportation, let alone the cost factor. __________________
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11-09-2005, 11:43 AM	#5
Alex . Join Date: Feb 2005 Posts: 13,354	That said, people do have alternatives to gasoline consumption. Also, I've had this windows box on now for almost two months without crash or failure. Lani's Powerbook crashed last night. And I drive a hybrid (one of the ones geared towards fuel efficiency not power). And I don't have a problem with gas prices going up to $10/gallon if the people who have the gas want to charge that much for it and the people who want the gas keep buying it. And the sky is purple in my world.
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