Frist is Running Already
On Tuesday, ExxonMobil, the world's largest publicly-traded oil company, announced net income of $9.9 billion for the most recent quarter, eclipsing analyst expectations and dwarfing the $5.68 billion reported for the same quarter a year ago. It was the largest quarterly profit ever for a U.S. company.
ExxonMobil wasn't alone. Royal Dutch Shell said today that profits grew 68 percent, to $9.03 billion, last quarter. Earlier in the week, BP announced profits at 34 percent above last year's levels, and ConocoPhillips saw revenue jump 43 percent.
The reason? High gas prices.
"The recent hurricanes in the U.S. have impacted our results. However, underlying performance is strong, amplified by high but volatile prices of oil, gas and products," BP Chief Executive Lord Browne said in a statement announcing the company's performance.
Consumers Pay Up
Despite temporary interruptions to refinery and delivery operations after Hurricanes Katrina and Rita ravaged the Gulf Coast, an accompanying surge in crude oil prices and prices at the pump allowed oil companies to bolster their earnings. Crude oil represents more than 50 percent of the cost of gasoline, and many oil companies were able to capitalize when the cost of a barrel of crude climbed above $60.
"What might have been lost in terms of production and refining capacity was more than made up for by the hurricanes driving oil prices up a couple dollars a barrel," said John Parry, an analyst with John S. Herold.
The oil giants' windfall is a stark contrast to the ugly scenes around U.S. gas stations in September — hours-long lines of drivers desperate to fill up, despite prices that often topped $3 per gallon. Some politicians are questioning why oil companies profited so much while consumers struggled to fill their tanks.
Even Republican lawmakers, who have historically counted on support from the oil industry, have asked for answers.
Senate Majority Leader Bill Frist today called for Senate hearings to examine the reasons for high energy prices. Noting the contradiction between the soaring profits and squeezed consumer budgets, Frist requested that executives from the country's major oil companies attend the hearings.
ExxonMobil wasn't alone. Royal Dutch Shell said today that profits grew 68 percent, to $9.03 billion, last quarter. Earlier in the week, BP announced profits at 34 percent above last year's levels, and ConocoPhillips saw revenue jump 43 percent.
The reason? High gas prices.
"The recent hurricanes in the U.S. have impacted our results. However, underlying performance is strong, amplified by high but volatile prices of oil, gas and products," BP Chief Executive Lord Browne said in a statement announcing the company's performance.
Consumers Pay Up
Despite temporary interruptions to refinery and delivery operations after Hurricanes Katrina and Rita ravaged the Gulf Coast, an accompanying surge in crude oil prices and prices at the pump allowed oil companies to bolster their earnings. Crude oil represents more than 50 percent of the cost of gasoline, and many oil companies were able to capitalize when the cost of a barrel of crude climbed above $60.
"What might have been lost in terms of production and refining capacity was more than made up for by the hurricanes driving oil prices up a couple dollars a barrel," said John Parry, an analyst with John S. Herold.
The oil giants' windfall is a stark contrast to the ugly scenes around U.S. gas stations in September — hours-long lines of drivers desperate to fill up, despite prices that often topped $3 per gallon. Some politicians are questioning why oil companies profited so much while consumers struggled to fill their tanks.
Even Republican lawmakers, who have historically counted on support from the oil industry, have asked for answers.
Senate Majority Leader Bill Frist today called for Senate hearings to examine the reasons for high energy prices. Noting the contradiction between the soaring profits and squeezed consumer budgets, Frist requested that executives from the country's major oil companies attend the hearings.
posted by TheFuriousGourmet | 12:35 PM
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