The same morning my local newspaper ran a story on people not being able afford to pay their electric bills this record breaking summer, the business news is abuzz with more record oil company earnings reports. One story highlighted one man’s monthly electric bill of over $660, more than $200 more than his rent. The other zeroed in on Royal Dutch Shell’s 2nd quarter earnings. With production down from 2005, profits increased 40%. That means they are earned a lot more for selling less.
Royal Dutch Shell’s earnings jumped 40 percent to $7.32 billion
BP PLC rose 30 percent to $7.3 billion
ConocoPhillips reported a 65 percent increase to $5.18 billion
Exxon Mobil Corp’s earnings rose 36 percent to $10.36 billion
Chevron announces earning tomorrow morning.
Yes during our record hot Texas summer, the oils’ financial statements are sizzling. That some of us can no longer afford to stay cool is just the price of free markets. The irony is this profitable product may be making our planet even hotter.
Our leaders might want to pay attention should they want to help the suffering common person. Their ability to help their corporate friends is clear. Leaders may also wish to dig a little deeper on understanding “root causes”. The current root cause analysis in the Middle East leaves much to be desired. Should that situation literally explode to the major oil producers in the region, watch out. Prices and profitability will continue to rise in the 30-65% range.
Next earnings week will be the end of October, just before the November elections. My guess from looking at local prices is big oil will tone down their earnings. Can’t have that shrill cry of record profits ringing in the voters’ ears as they pull the lever!