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Three Reasons Gas Prices are High

cchuba Wrote: Apr 10, 2012 10:08 AM
I love oil companies and I hate seeing them demonized but these Republican talking points are completely wrong. It's true that the refiners and retailers do not make much money but the oil producers make a good profit which is why oil production is booming. "oil companies (exxon, shell, etc). about 8 cents per gallon;" - July. July, that would mean that oil companies only make $1.60 cents per barrel of oil produced, that is patently ridiculous.
scott s. Wrote: Apr 10, 2012 6:29 PM
I think the problem of your analysis is this: looking at XOM for 2011, they produced about 2 million bpd of oil at an average price of $100 and average production cost of $12, so the gross margin would be $88/barrel on the upstream business. But in an extractive industry, you have to account for the reduction in the reserve of resource, because if you do nothing you run out of resource. So you have to in general replace the resource you extracted with new resources which costs money. That's how you get to upstream earnings of $34 billion (includes oil and nat gas). That's $10 billion up from 2010, not bad I guess. (I own stock of Royal Dutch Shell myself).
Bernard83 Wrote: Apr 10, 2012 2:09 PM
CC they are talking about net profit here not gross and 8% is low but that is what it is.
cchuba Wrote: Apr 10, 2012 12:22 PM
July, I completely and totally agree that this is plausible for their refining business. As a matter of fact, since they are discussing GASOLINE it is highly plausible. However, this does not include the profit that they make from selling oil. There is no way any company would produce oil if they only make $2 per barrel when oil is selling for $100.
julybaby Wrote: Apr 10, 2012 10:43 AM
According to this post on Exxon Mobil’s Perspective Blog , “For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents.” Exxon also reports that in 2010 it “made less than 8 cents for every dollar of revenue from all of our businesses around the world.”.

The blatant hypocrisy and arrogance of president Obama, Nancy Pelosi, and Hillary Clinton in the  video below is simple stunning.

Caroline Baum on "Obama the Omniscient"

Inquiring minds are reading Bloomberg columnist Caroline Baum's article President Scapegoat Can’t Stop Picking on Big Oil

Barack Obama isn’t the first U.S. president to conjure up scapegoats to serve his political ends. The Roosevelts, both Teddy and Franklin, were masters at the game. TR decided the trusts were an enemy of the people and busted the likes of Standard Oil and Northern Securities, which controlled the railroads in the northwest. FDR demonized just...

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