O'Reilly Was Right!!!

October 27, 2005

Exxon Mobil Profit, Sales Soar to Records

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Exxon Mobil Corp. (XOM) rewrote the corporate record books Thursday as the oil company's third-quarter earnings soared to almost $10 billion and it became the first public company ever with quarterly sales topping $100 billion. Anglo-Dutch competitor Royal Dutch Shell PLC (RDSA) wasn't far behind, posting a profit of $9 billion for the quarter.

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The previous oil-industry earnings record was Exxon's 2004 fourth-quarter profit of $8.42 billion. Third-quarter revenue jumped to $100.72 billion from $76.38 billion in the prior-year period.

To put its performance into perspective, Exxon's revenue for the three-month period was greater than the annual gross domestic product of some of the largest oil producing nations, including the United Arab Emirates and Kuwait - even though it lost considerable production because of a string of hurricanes that battered the U.S. Gulf coast.

From what I understand there are two issues at work.

1) Price of crude oil. If it costs Exxon/Mobil $18/barrel to get the oil out of the ground than there is $12/barrel profit when crude oil is at $30/barrel. When crude goes up to $60/barrel the profits go up to $42/barrel. In their defense: Exxon/Mobil does not determine the cost of oil, the free market does, and during some years in the '90s oil was down to $13/barrel and they were losing money on oil production.

2) Oil companies not only make money off from oil production but also refining the oil into usable products. The spread should remain the same. That is, if an oil company makes 30¢/gallon on gasoline when oil is $30/barrel, it should continue to make 30¢/gallon when oil is $60/barrel. However this is where it appears the oil companies are not being ethical. As oil prices have increased, they have increased the spread they are charging for the refined product.

That would be justifiable if the price of oil was below the cost of production. That is, if they were losing money when they pull the oil out of the ground, it would be justifiable for them to bump up their profit margin on the refined products. However as it is, they are making money hand over fist on oil production while increasing their profit margins on the refined products.

While I agree something needs to be done. I think it foolish to tax them more like the Democrats what to do. Regulate them more perhaps, but any additional taxation is only going to be passed onto the consumer.

Bill O"Reilly Oil Debate

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My contention is the oil companies don't have to double their profits. They can maybe make them 2/5. Take a little less for the good of the nation?

Tracking Down High Fuel Prices

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Eight governors have now asked President Bush to investigate alleged price gouging. They base their assertions on a study done by economist Don Nichols, who says for gasoline to cost $3 a gallon, the barrel price that OPEC charges would have to be $95. Since OPEC is presently charging $58, Professor Nichols concludes the US oil companies have some explaining to do

October 28, 2005

Oil - both crude and refined - is a GLOBAL commodity

The DEMAND for oil has soared as Brazil, India, China, Russia and others have all ramped their economies. This demand has pushed the price up regardless of the currency you buy it in.

Under Bush's superb leadership the USA $ has crashed compared to other currencies - maybe something to do with the huge debt he is running up. This crash has pushed up the number of US$ that correspond to other currencies. This has pushed the price higher.

The combined effect is the price in $ for a gallon of gasoline has soared. This is called CAPITALISM.

As a result the owners and management of oil companies - including their share holders - are doing very well. This is why they need a tax break.

Bush is in command - the looting is continuing.

/Bevin

October 28, 2005

The problem with those sentiments is that while the price of gasoline has increaed a lot, it is still cheaper in the US than most other parts of the world.

October 28, 2005

Quote:

it is still cheaper in the US than most other parts of the world.

This is an apples-and-oranges comparison.

In many countries gasoline has a high tax on it. This tax is used to pay for sewers, water, roads, hospitals, armies, education...

In the USA these things are paid for differently.

My parents in NZ pay about $200 PER YEAR property tax. In NH I pay around $7,000.

My parents in NZ payed about $0 per year towards my university education. Here I am paying around $20,000 for each of my children.

My parents in NZ pay $0 per year medical insurance. Here I am paying around $10,000.

Before you compare the price of gasoline, you have to deduct all the indirect payments that are being made when you buy it.

Then I suspect you will find the cost is much the same.

/Bevin

October 28, 2005

Gasoline isn't even the same price accross the street or a few miles down the road. Within the state of Texas alone, the price of gas ranges about 30¢/gallon.

The problem isn't the Bush Adminstration. The problem is simply that the oil companies are taking advantage of the American people. If the oil companies become regulated like public utility companies have been for years, that will not happen. I suspect that will be discussed as an option. Senator Bill Frist is now calling for hearings.

October 28, 2005

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Shane said:

The problem isn't the Bush Adminstration.

Reminds me of the band playing "Nearer My God to Thee" as the Titanic was going down.

October 28, 2005

Show me what the Bush Administration has done to cause gas prices to go up.

If it is the President's fault. Please tell me what President Nixion and President Carter did to drive up the price of gas during their administrations.

As Brother Bevin has pointed out, global demand has caused the price of oil to increase. He tried to blame the decrease in value of the dollar but that is all smoke and mirrors. Oil is bought and sold with US dollars worldwide (although Russia was talking about switching to euros and may have). China and India are developing econominically. More people are buying cars and thus gasoline. As demand increases, supply must also increase or the price will skyrocket. So it is the rapid increase of gloabl demand that has caused the increase in price.

However the oil companies have taken advantage of rising prices. Rather than just passing on their increased costs, they added on increased profits, which is bad for the economy and bad for the country. They took advantage of rising prices to "hide" increasing their profits. Please don't tell me that was all Bush's idea.

October 29, 2005

Shane

Oil is a free market. Gas companies inside the USA are free to charge whatever they like because they compete with each other.

As the demand goes up, the profits go up. This is called capitalism.

Within a small area, like your town, stations compete based on PRICE, CONVENIENCE, and BRAND. This accounts for the price difference - lucky you gets to buy at the cheapest one. If I want the convenience of the other, I pay a bit more - lucky me. If the expensive one looses enough customers it will lower its prices...

Any sensible government would see this as a good time to RAISE TAXES to cover the HUGE DEBTS they are running up.

Bush et al, being into looting the economy to benefit multi-millionaires, thinks it is a great time to LOWER TAXES.

Bush is in charge, let the looting continue.

/Bevin

October 29, 2005

Quote:

Oil is bought and sold with US dollars worldwide (although Russia was talking about switching to euros and may have).

ROFLOL - you don't understand currency. Currency is bought and sold, just like oil.

/Bevin

October 30, 2005

Yes, Brother Bevin, I live on the border. I understand currently is bought and sold like oil. The price of the dollar and peso are on each evening's newscast.

Yet when I go into Mexico to buy something, some places charge in dollars and other places in pesos. The prices in the places that charge in dollars doesn't change with the change in the currency value. So if my doctor charges $15 per visit it will remain that regardless what the dollar or peso does. However if she charges 100 pesos that will change from day to day depending on the value of the dollar.

Since OPEC sells oil in dollars, the changing value on the dollar doesn't impact the price of oil.

October 30, 2005

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As the demand goes up, the profits go up. This is called capitalism.

So it is ok that five years ago oil companies made 30¢/gallon and recently they have been making $1/gallon? That is not how public utility company's work. Nor is it how banks work.

October 30, 2005

Quote:

ince OPEC sells oil in dollars, the changing value on the dollar doesn't impact the price of oil.

Don't be silly.

As the dollar falls, the number of dollars required to buy a barrel of oil goes up. And vice versa. There are other effects at work also. Supply and demand being the main ones. The supply has been somewhat reduced lately, and the demand continues to soar...

/Bevin

October 30, 2005

Quote:

So it is ok that five years ago oil companies made 30¢/gallon and recently they have been making $1/gallon?

Yes - this is called a free market or capitalism. It works for fruit growers, plumbers, and car manufacturers. Why should oil companies be any different?

Quote:

That is not how public utility company's work.

PUC's are usually regulated monopolies. They are not free market companies.

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Nor is it how banks work.

Sure is. That is why interest rates on bank accounts are so low right now.

/Bevin

October 30, 2005

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As the dollar falls, the number of dollars required to buy a barrel of oil goes up.

Not true. Oil is sold in dollars. The price is determined by supply and demand - not the value of the dollar.

Note: there are some countries that will also sell oil in euros but the oil purchased by US companies is purchased in dollars.

October 30, 2005

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That is why interest rates on bank accounts are so low right now.

Interest rates are low because the federal reserve lowered them during the recession. The prime rate is the rate the fed charges to loan money to banks. Banks then, in turn, loan the money to customers. The margin that banks add to the rate they pay the fed is the same. So if the bank pays 4.5% and adds 1% to it, the customer would pay 5.5%. If the bank pays 7.5% for the money and adds 1% to it, the customer pays 8.5%. The bank doesn't increase their margin just because the fed has increased the rate. Competition keeps them from doing so.

Now it has become obvious that competition isn't keeping the margins down in the oil industry. That is what Congress needs to investigate. Why is competition failing? Do these companies need to be regulated?

October 30, 2005

Quote:

Not true. Oil is sold in dollars. The price is determined by supply and demand - not the value of the dollar.

Note: there are some countries that will also sell oil in euros but the oil purchased by US companies is purchased in dollars.

As the dollar falls against other currencies - so the other countries can get more dollars for their currency, so they can afford to bid higher in the oil auction, so the price of oil in dollars goes up.

/Bevin

October 30, 2005

I think the fact that some oil-producting nations have started selling oil in euros has hurt the dollar and helped the euro too. A currency is only as valuable as the commodities it can purchase and oil is one of the most demanded commodities.

October 30, 2005

Dollars have always been exchangable with Euros and other currencies. You have always been able to buy oil with Euros (at least since Euros came into existence) or any other currency.

The problem is simply that (a) the US govt is running up a huge debt and the only way to pay it will be to print $ bills, and so $ bills are not worth what they used to be; and ( the USA is no longer the sole or low cost supplier of goods the world needs...

/Bevin

October 31, 2005

QR Window:

There are those who’ve seen in some few prophetic Biblical depictions or symbology the emergence of preeminent Corporate States. Would it be too fanciful to suggest

that, as events are unfolding… they begin to presage Corporate States? I mean,

it hardly does for the Western States to engage in ‘torture’ or some other egregious practice -- to guarantee its interests; whereas, the international Corporate State wouldn’t necessarily be constrained by those same laws, admonishments, etc (be they national or international in scope) customarily thought as applying to the constituted Democratic, Republican, or Parliamentarian State…, or to Treaties agreed upon.

It might not be advisable for us as a nation to invade Central Africa for its colban, or So Africa for its chromium, manganese, platinum group, etc; however, the interested Corporate State(s) could do so to guarantee access -- under the radar, so to speak, with its/their own militia or [hired] strike force…, --feasibly in opposition to an adversarial cartel, State, or other interested party -- with nar’ a complaint from a censored media.

Should it be that, as the Corporate State emerges, that would be more in keeping with the symbology of ‘beasts’ arising out of the seas, as it has been suggested that Admiralty or Maritime courts have jurisdiction of the incorporated fictional entity, the Corporation. Though Revelation indicates that ‘waters’ (or seas?) represents many peoples…, how would that proscribe it referencing the many shareholders that participate in the affairs of the Corporation? And could not

Revelation 18 be speaking to Corporate States? where the “…and slaves, and souls of men” (Rev 18:12) are no more than items/notations (debtors) -- the least in value by descending order, in the inventory of emerging Corporations?

Of interest:…?

“It is worth noting the causes for the Colonist revolt against England (it wasn’t the Boston tea party)… On July 6 1775, a declaration by the representatives of the united colonies of North America, met in Congress at Philadelphia setting forth the Causes and necessity of their taking up arms.

"…They (England) have undertaken to give and grant our money without our consent (seizing from the colonies the right to issue their own colonial script which destroyed the colonial economy). Though we have ever exercised an exclusive right to dispose of our own property; statutes have been passed for extending the jurisdiction of courts of admiralty and vice-admiralty beyond their ancient limits;” ” [ed.]

Fanciful? Not really, if one understands that the orthodox interpretation of Writ regards the beasts of Daniel 7 -- cannot be sustained… by Writ.

Oh, have you noticed that when before the bench in our courts -- all titles are in CAPS? your name, the incorporated, etc…?

Of interest:…?

“Capitis Diminutio (meaning the diminishing of status through the use of capitalization) – In Roman law. A diminishing or abridgment of personality; a loss or curtailment of a man’s status or aggregate of legal attributes and qualifications.

Capitis Diminutio Minima (meaning a minimum loss of status through the use of capitalization, e.g. John Doe) - The lowest or least comprehensive degree of loss of status. This occurred where a man’s family relations alone were changed. It happened upon the arrogation [pride] of a person who had been his own master, (sui juris,) [of his own right, not under any legal disability] or upon the emancipation of one who had been under the patria potestas. [Parental authority] It left the rights of liberty and citizenship unaltered. See Inst. 1, 16, pr.; 1, 2, 3; Dig. 4, 5, 11; Mackeld. Rom.Law, 144.

Capitis Diminutio Media (meaning a medium loss of status through the use of capitalization, e.g. John DOE) – A lessor or medium loss of status. This occurred where a man loses his rights of citizenship, but without losing his liberty. It carried away also the family rights.

Capitis Diminutio Maxima (meaning a maximum loss of status through the use of capitalization, e.g. JOHN DOE or DOE JOHN) – The highest or most comprehensive loss of status. This occurred when a man’s condition was changed from one of freedom to one of bondage, when he became a slave. It swept away with it all rights of citizenship and all family rights.

Diminutio. – Lat. In civil law. Diminution; a taking away; loss or depravation.

Capite. - Lat. By the head.

Reference: Blacks Law Dictionary – Revised 4th Edition 1968

As Black’s Law Dictionary explains, the full capitalization of the letters of one’s natural name, results in a diminishing or complete loss of legal or citizenship status, wherein one actually becomes a slave or an item of inventory. The method by which the State causes a natural person to "volunteer" himself into slavery, is through forming legal joinder, implied or stated, with the entity or legal fiction (name all CAPS).”

October 31, 2005

Not all oil-producing nations do sell oil in euros. There are several factors that impact the value of the dollar, only a few have been mentioned here.

October 31, 2005

Quote:

Not all oil-producing nations do sell oil in euros.

It doesn't matter what currency it is sold in. Currencies are easily interchangeable.

Quote:

There are several factors that impact the value of the dollar, only a few have been mentioned here.

Oil is bought and sold on the non-regulated world market basically by auction. Individual producers can decide that they won't sell to a particular consumer - but that makes no difference because other producers will. They can also choose to sell below the market rate to specific consumers, but that just diminishes their profits.

You were originally commenting on the high price of gas in the USA - and the record profits being made by the oil companies.

Unless you agree to either (a) regulate the sale of gasoline, or ( increase the taxes on the oil companies, what they are doing is perfectly sensible.

What do you propose to change?

/Bevin

October 31, 2005

Obviously there isn't enough competition in the market place. I saw one figure that showed the oil companies were making over 50% profit! That shows lack of competition. In the commercial construction business we are lucky if we get 10% profit, often times we get closer to 4%. Those slim margins are due to competition. If oil companies are making 50% or even 30%, there is obviously a lack of compitition. Perhaps the government needs to break up some companies like Exxon/Mobil that consuladated before.

October 31, 2005

Practically the only sure thing in a very dangerous world of stock speculating... should be left well enough alone.

Instead of castigating the 'oil companies', mebbe it's time to move those basically non-performing monie$ in saving$ and other account$

into 'oil-appreciating stock and dividends' for the short term..., the risk being that their oil field reserves and leases are getting kinda iffy (why, it's speculated, that they've not vigorously pursued building new refineries)

Per dollars and oil sales... the world is practically awash in petro-dollars. It dominates the market, but that's as it should be, as it was us who first approached Libya and Nigeria (light crude/sweet oil) to, in return for help in pushing the price of of oil upward, agree to -- basically move oil money into bank holding entities. We next approached Saudi Arabia with help in forming OPEC in return for denominating the price of world oil in dollars, that is,

petrodollars. (major reason for invading Iraq... Saddam was negotiating to denominate the sale of oil in €uros)

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