But the Cost of Oil has gone up!

[POS Racing]

How many times have you read where the price of Oil has gone up.

And how that has forced the oil companies and utilities to raise prices to counteract the increases.

Then I read this :

IRVING, Texas - Exxon Mobil Corp. posted record profits for any U.S. company on Monday — $10.71 billion for the fourth quarter and $36.13 billion for the year — as the world’s biggest publicly traded oil company benefited from high oil and gas prices and demand for refined products. The results exceeded Wall Street expectations.

[Majik]

So buy stock in them....

[Miatamoto]

Profits are high but what are their profit margins?

[POS Racing]

So buy stock in them....

Ya think it would be better than my General Motors Stock!

[Bolix]

Profits are high but what are their profit margins?

Bingo. They could be making $1 economic profit(not including possible gov't subsidies that is). And that's basically how it has to work becuase now that we are paying more for gas/oil and they have more money they can get to the other remaining oil reserves that were previously too expensive for the companies to drill for, thus we don't run out of oil like they keep threatening.

And they say 18 year olds don't know anything

[channelmaniac]

But if they spent that money drilling they wouldn't have the record profit...

[Bolix]

But if they spent that money drilling they wouldn't have the record profit...

Which goes back to the point about economic profit and/or marginal profit.

Example: GM in Q4 of 2005 lost roughly $36,000 every minute, yet the high ups are still making $million+ salaries.... funny how that works.

[icepenguin66]

Yeah, if I remember correctly, they only make around a 10% profit as apposed to the profits of other major corporations such as Microsoft, which make up to 20% profit of their sales. Not to mention all of the wonderful American beauracracy that deters the oil companies from investing in American oil technology because it's more cost evective and less hastle to source everything out to other countries.

On the other hand those bastards in the Middle East are paying an exorbant price of what is it up to now, 30 cents a gallon! They can produce a barrel of oil at something like $5 a barrel yet turn around and sell it to us at $50-70 a barrel. Talk about a profit!