ExxonMobil is one example of how much big oil companies have benefited from the recent run-up in oil prices, even as major hurricanes have destroyed much of the industry's infrastructure in the Gulf Coast.
$10 Billion in Net Income, $100 Billion in Revenues
Exxon's net income went up 75 percent to nearly $10 billion in the third quarter; this is the most a U.S. company has earned from operations in a three-month period. It is greater than the annual gross domestic product of some entire nations.
Exxon's revenue went up 32 percent to over $100 billion, which is greater than the annual GDP of all but 38 countries.
More Than Industrial and Telecom Combined
Other companies have increased their profits similarly, and the industry as a whole is likely to earn $100 billion in net income this year, which is more than what the United States' industrial and telecom companies combined will earn.
The soaring profits have come as a result of oil companies selling gasoline to wholesalers at record prices. The difference between the price of oil and the price charged to wholesalers hit a record.
I have not made a great study of the subject of oil price fluctuations and oil company profits, but if you ask me, this just doesn't add up. The price of gas shot up beyond $3 per gallon and the oil companies -- not the people who are selling oil to the oil companies -- have record profits.
Many of you are also in for a rude awakening when you go to pay your heating bill this winter. I was quite shocked to see my November bill increase by nearly 300 percent over 2004. I knew it was going up but hadn't anticipated that level of increase. I suspect many people will really begin to wonder about the headline of this article when they start to see their mid-winter heating bills.
Makes you wonder what would've happened if Hurricanes Rita and Katrina wouldn't have caused nearly so much trouble along the Gulf Coast where much of this country's oil refining is done ...
It all sounds a bit like the shell game the mega-drug companies use to justify "inventing" new drugs to take the place of older ones or to treat imaginary conditions.