The price of crude oil is creeping up everyday. I don’t think anyone would have thought it would ever really break $100 a barrel. Today it tip toed above $110 mark before retreating back to $109.92. Summer isn’t here yet, but I can almost hear the gas companies snickering over my shoulder, waiting to publish another record breaking profit for the current quarter that will be even more unbelievable than last quarter’s profit.
NEW YORK (CNNMoney.com) — Exxon Mobil made history on Friday by reporting the highest quarterly and annual profits ever for a U.S. company, boosted in large part by soaring crude prices.
Exxon, the world’s largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. The company earned $10.25 billion, or $1.76 per share, in the year-ago period.
The profit topped Exxon’s previous quarterly record of $10.7 billion, set in the fourth quarter of 2005, which also was an all-time high for a U.S. corporation.
“Exxon can put out some amazing numbers and this is one of those cases,” said Jason Gammel, senior analyst at Macquarie Securities in New York.
Exxon also set an annual profit record by earning $40.61 billion last year - or nearly $1,300 per second in 2007. That exceeded its previous record of $39.5 billion in 2006.
In the fourth quarter, the company said revenue rose 29.5% from a year ago to $116.64 billion.
Analysts were looking for the company to report quarterly profit of $10.36 billion on revenue of $114.9 billion, according to earnings tracker Thomson Financial.
It really is strange that the higher price goes up the higher the oil companies’ profits goes up. It’s almost as if the price of crude actually has nothing to do with supply and demand, but more about how much the oil companies can squeeze the consumer at the pump.
The price of oil increases have been affected by all the interest rate cuts the federal reserve have implemented in a failed attempt to turn the housing recession around. As they did this, our currency became less attractive against other global currencies which in turn made the prices of many commodities skyrocket including crude oil.
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I’ve often wondered how it is that the consumer is paying through the nose for gas, yet the oil companies are making historic profits. Also here in Canada where oil is plentiful, the costs go up with the market even though there’s no need to do that. The problem is when gas goes up, everything does because of transportation costs. What can we do about this?
us companies are free to make what they want in profits fair or unfair. however if
the us tax payer wants to pony up tax dollars to take over the industry and explore pump the oil and produce gas we will continue to pay the higher prices. i dont see joe tax payer wanting to pay thoses cost associated with gas. they want someone else to pay and then get it for next to nothing.
Hi Zhereford,
The only thing we can do is not buy gas. lol
Cheers!
Hi David,
We actually give the oil companies tax breaks. This is money that should be used for those types of ventures. Because they aren’t Congress is currently trying to take those subsidies away because it is not being used for their true purpose. They are just padding their profits. In a sense, oil companies are stealing tax money legally. When they stop taking oil tax breaks then they can make all the profit they want, but not with tax subsidies. That tax money would otherwise be collected and be put to better use.
Cheers!
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