Economic downturn? Not for big oil...

[berzerker]

Just the title of the article makes me a little nauseous...

Exxon Mobil: Biggest profit in U.S. history
Largest U.S. oil company surges past analyst estimates to post net income of $14.83 billion.

CNN Money (http://money.cnn.com/2008/10/30/news/companies/exxon_earnings/index.htm?cnn=yes)

[Slar]

I paid $2.129 for gas yesterday and was able to fill my tank for under $30. Hope this trend continues and that Exxon jumps off a cliff with Venezuela.

[markalot]

Wait till next quarter. You can look at it as a validation of what they claimed would happen, boom and bust. If they saved the profits they will be in a great position to survive very low oil prices.

If they continue to make outlandish profits with oil at $65 a barrel then we'll see.

So you hope gas prices stay low but you also hope big oil suffers. Now now, think that through. If they have to close refineries and lay off workers to stay profitable that will drive up gas prices.

[berzerker]

Wait till next quarter. You can look at it as a validation of what they claimed would happen, boom and bust. If they saved the profits they will be in a great position to survive very low oil prices.

If they continue to make outlandish profits with oil at $65 a barrel then we'll see.

So you hope gas prices stay low but you also hope big oil suffers. Now now, think that through. If they have to close refineries and lay off workers to stay profitable that will drive up gas prices.

Myopically, I hope nobody suffers.

But since this is a capitalist society (until Obama takes over, and we're all in breadlines on January 22nd ;) ) I sure wish that the oil companies take it in the teeth at least once every decade or so... they won't ever come close to being forced to get a second mortgage, or maybe not paying the electric bill, or maybe only serving Ramen in the executive lunchroom.

Can't say the same for their consumers.

[the happy prole]

Why would closing refineries and firing workers drive up oil prices? The whole reason you do that is to cut costs.

[berzerker]

Why would closing refineries and firing workers drive up oil prices? The whole reason you do that is to cut costs.

They wouldn't do it to cut costs - they'd do it to cut supply, making it more valuable, so they can continue keep the cost high...

[dannyboy]

Wouldn't record profits make investors want to buy Exxon Mobil stock? Isn't that good for the economy?

[the_birds]

Most Oil Companies have profitability points much lower than $40 dollars a barrel. Depending on the fields, infrastructure and everything else. Its really going to hurt places like Canada where the labor intensive oil extraction makes the profit point over $60 a barrel. Most long established fields profit at no more that $25 to $30 a barrel.

Its the Oil producing countries that are going to have major issues if the price falls any farther than it is now.

The companies will still make money, but our 'friends' will be having some issues.

[Slar]

Oh I've got mixed emotions about gas prices dropping: joy and happiness.

Obviously Exxon is going to be feeling the pinch over the new few quarters, so I'm glad that they will be sharing in the pain from the current economic situation.

I've been wondering as well if the high gas prices were a symptom or a cause of this mess. It's not hard to imagine that record prices could make it hard to meet the mortgage at the end of the month and result in foreclosures.

[the happy prole]

They wouldn't do it to cut costs - they'd do it to cut supply, making it more valuable, so they can continue keep the cost high...

If they could derive more profit from supplying less gas to consumers, why aren't they doing it already?

[berzerker]

Oh I've got mixed emotions about gas prices dropping: joy and happiness.

Obviously Exxon is going to be feeling the pinch over the new few quarters, so I'm glad that they will be sharing in the pain from the current economic situation.

I've been wondering as well if the high gas prices were a symptom or a cause of this mess. It's not hard to imagine that record prices could make it hard to meet the mortgage at the end of the month and result in foreclosures.

Big picture, I agree with you - glad they're low, but nervous about their supposed future "downturn" (OPEC is already cutting output to increase the cost...) and it's effect on the overall economy in general.

Sure, it hurts the economy when a big industry leader posts a loss, but why shouldn't I be angry when one of those companies with record high prices that can theoretically (as opined above) be linked to a huge economic downturn in a couple easy-to-make logical steps continues to stack up huge piles of money?

[markalot]

If they could derive more profit from supplying less gas to consumers, why aren't they doing it already?

I had a longer view.

If oil companies are hit by hard times and forced to downsize and then gas usage started to increase again we'd be looking at even higher gas prices once oil rebounds.

And to answer your question, I think we need more refining capacity but there is little incentive to add it since limited capacity helps support high fuel costs.

[markalot]

Dammit Slar,

I have just realized that those buttons are part of your signature.

Genius, again.

I'm telling the mods you hacked the boards.

[berzerker]

If they could derive more profit from supplying less gas to consumers, why aren't they doing it already?

Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2006/10/19/AR2006101900965.html)

Fox News (http://www.foxnews.com/story/0,2933,219637,00.html)

Reuters (http://www.reuters.com/article/newsOne/idUSTRE49L50I20081024)

[classicgrrl]

Dammit Slar,

I have just realized that those buttons are part of your signature.

Genius, again.

I'm telling the mods you hacked the boards.

you're soooooooo gullable. :p:D

I do the same thing....

[the happy prole]

Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2006/10/19/AR2006101900965.html)

Fox News (http://www.foxnews.com/story/0,2933,219637,00.html)

Reuters (http://www.reuters.com/article/newsOne/idUSTRE49L50I20081024)

meh, that OPEC shit never works. They all vow not to sell below a certain amount, and then they all cheat and do it anyway. Price collusion in an open market is actually rather hard.

[Slar]

Dammit Slar,

I have just realized that those buttons are part of your signature.

Genius, again.

I'm telling the mods you hacked the boards.Glad to oblige! I'm just wondering what other things I've done that have been genius. :p