Oil firms' profits keep dropping as recession shrinks demand for energy


	Oil firms' profits keep dropping as recession shrinks demand for energy

JICWyllie

11-1-2009 7:49 AM

19 views

tags:

1-profits, 1-supply, 2-consequences, 2-decrease, 3-reported, 4-intl

JICWyllie says:

What will happen if the price falls back to less than $50 a barrel? The key is that the oil price is really based on the most people can afford, not supply. If it doesn't pay to maintain supply because costs are higher than income generated, then supply will not be maintained.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/d26183f0-2cf6-459a-886c-d21e660b6fb5/F7AD1D3A-6DDF-4773-9D44-DCDCF1BAB2EE/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102904268.html?hpid=moreheadlines" href="http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102904268.html?hpid=moreheadlines" style="font-size: 11px;">www.washingtonpost.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102904268.html?hpid=moreheadlines">The world's biggest oil companies are reporting sharp declines in quarterly profit as the recession continues to weigh on consumer demand, driving down energy prices.
</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102904268.html?hpid=moreheadlines">Exxon's refining business took an especially large hit from July to September, with profits dropping 89 percent, as gasoline and diesel prices fell. Shell, whose refining earnings declined 47 percent, said the plunge in demand will keep profit margins narrow in "the short and medium term" and a quick recovery in energy usage and prices is unlikely.
</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102904268.html?hpid=moreheadlines">"If you look at the whole picture for all the big oils, the only thing that's really helped them is that the oil price has come off the floor,</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.washingtonpost.com/wp-dyn/content/article/2009/10/29/AR2009102904268.html?hpid=moreheadlines">Those rising prices -- which usually fatten profits at companies such as Exxon -- have come with a cost, however. The refining side of the business is getting hit hard because it must pay more for crude to make fuel, but consumer demand for fuel has not rebounded as strongly.
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