Monday, January 30, 2006

The End of Oil Profits? 


Exxon posted $36 Billion in profits this year. Yes, that's Billion. That's $120 for every single person in the country. That's an extra $480 for a family of four, or about $40/month. Strangely, that's exactly how much more a month's power would cost if I used it at the same rate as last year (my gas is 37% higher than last year at this time).

I know, Exxon didn't just make money from Americans. But it's also not the only company providing fuel. Imagine if the entire increase in fuel prices was for profit? Well, $480 for Vulfy's family speaks to it (we have, however, cut our energy use by 40% [due in part to global warming...we're wolves, not saints], so we're even).

This is an amazing announcement!

Exxon is worth more than Indonesia (with almost the same population as the US):

Exxon's performance last year allowed it to surpass Wal-Mart as the largest company in United States, and by some measures Exxon became richer than some of world's largest oil-producing nations. For instance, its revenue of $371 billion surpassed the gross domestic product of $245 billion of Indonesia, an OPEC member and the world's fourth most populous country with 242 million people.

10% of their revenue is profit.

Profit in 2005 reached $36.13 billion on revenue of $371 billion. The annual profit easily surpassed the previous record of $25.3 billion, which Exxon had also set in 2004, according to Howard Silverblatt, senior index analyst at Standard & Poor's in New York. Only Ford Motor's profit of $22 billion in 1998 resemble Exxon's success in recent memory, Silverblatt said. The company's quarterly revenue rose to $99.66 billion from $83.37 billion a year ago but was less than the $100.72 billion Exxon posted in the third quarter, the first time a U.S. public company generated more than $100 billion in sales in a single quarter.

Noticing a trend? Ford seven years ago, now Exxon this year. Rather than chastising Exxon, I think one should look at this result and predict that Exxon will bottom out in seven years (just like Ford has seven years after its extortionate profits). Exxon needs to invest this money wisely. I give oil another 7 years. Then, indeed, is the End of Oil.

So, instead of the easy take on this--Exxon is a rapacious oil company, profiteering on Bush's war for raising oil prices and profits--let's look futher. Exxon's success, like Ford's 7 years ago, signifies a temporary high that will shortly be followed by a crash. Let's hope their (our) money is being invested wisely. 2013 depends on it.


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