Record costs of crude oil are leading to record profits for oil companies who have to buy the higher priced crude to make their refined products to sell.  When their materials cost goes up (i.e., the cost of crude oil), one would expect their profit to suffer as in other industries.  For example, in the automobile industry, profits tend to suffer when the cost of labor, parts, steel, etc., goes up.  Airline profits go down when the cost of jet fuel goes up.  Why does the oil industry work differently in this regard?
132457
Check out gold and other commodity markets.  See Newmont Mining as an example of a gold company.  The oil companies are also producers of crude oil so they get to charge the current market rate for crude oil.  Major oil companies tend to be vertically integrated so folks don't see the commodity side of the business.
171382
The Bush family has made all there money for years of of oil and dirty deeds. If you research it you will find there was a deal with Sadam about a pipe line to be built, And when he refused we went to war!! These oil companies are making record profits!!! No one is doing anything to stop them. And oil is part of the reason we are at war, to control more oil!!
579562
Inflation.  Today's high gas prices are caused not by shortages, as the world is awash with oil.  The current pricing is driven by distribution.  Any disruption of the distribution process creates shortages, which lead to scarcity and high prices.  Current oil prices are driven by speculation in the oil commodities market.  At some point, fuel alternatives will be developed, and prices will abate.  When that happens, speculators holding high priced oil futures contracts will lose money.  The propensity is to keep prices high to avoid loss.  When, and if oil production in offshore Gulf of Mexico come back on line, oil prices will drop, probably sharply.\nThe price of petroleum affects every aspect in the production of economic goods and services, worldwide.
169655
Let's take a look at a few facts.  First, the cost of crude oil for each gallon of gas sold in this country has gone up from about 35 cents per gallon in 1999 to $1.59 per gallon in 2006.   So ... crude oil prices go up by 454% over a period of seven years.  How much did gas prices go up during the same period?  Try 162%.  Looks to me like things could be worse.\n\nSo ... did George Bush set those crude oil prices?  Did the oil companies go out there and set the prices that high?  Helllloooo!  Do you think the oil producing countries like Saudi Arabia might have had anything to do with it?  Is it possible that the ever-increasing worldwide demand for crude oil was a factor?  How about the fact that oil exploration slowed several years ago when crude was selling for under $20 a barrel?  Now that the price is so much higher many more companies are getting into the exploration business ... but it takes somewhere around 5 years from discovery of an oil deposit to actual production.  The price of oil didn't start its uphill swing until about 2004.  Do the math.  You also have the fact that oil is a commodity that is traded on the New York Mercantile Exchange.  Traders have much to do about setting prices.  Do you suppose that George Bush is calling these traders in to coach them on just what those prices should be?  That's what the Democrats want you to believe.\n\nIn short, when supplies increase and demand decreases.
308392
Oil prices are high because the demand is high.  \n\nImagine you had a pill that cured every health problem--obsesity, AIDS, cancer, and everything in between.  What would you sell it for?  You could sell it for $1 a pill--because everyone would want one.  Or, you could sell it for $1 million a pill--because everyone would want one.  Some people would sell it for $1.  Some people would sell it for $1 million.  People would fall everywhere in between.  \n\nWell, the oil companies don't have a magic pill, but they do have something that most of their customers cannot imagine living without.  They've realized that they can make a profit at $1.50 a gallon, but they can make a much better profit at $3.50 a gallon.  Why wouldn't they raise their price?\n\nAlthough I think the high prices suck, in the long term it is a good thing, because it will increase efforts to develop new kinds of energy and cars that are more efficient.\n\nBrazil has a fuel that is similar to ethanol that is made out of sugar instead of corn.  (Sugar is their main export.)  Since they developed this fuel, Brazil required cars to run on the stuff, and they are completely independent of foreign oil.  The U.S. should do the same thing with ethanol.  We could be done with foreign oil in ten years.
397274
Market forces my behind. The price of crude is still dropping while the price of gas is creeping up again. Are people really trying to say the price of gas dropped seventy five cents after labor day because the summer driving season ended? Get real. The oil industry is globally manipulated and further down the chain manipulated by everyone who can manipulate it. Every oil company dumps their gas into a common pipeline and then pulls it out somewhere else along that pipeline. Exxon-Mobil, Citgo, Chevron...it's all the same gasoline. They each add some ingredients to try to distinguish themselves from one another with whatever they claim their gas does to enhance your engines performance. Think there's no manipulation? What happened to the oil shortage from thirty five years ago?
239189
I don't want to create a conspiracy theory here - that the gas companies haven't built refineries, so that the supply has remained steady whereas demand skyrocketed, driving up the price...as the companies have seen quarterly profits that are unheard of.  I won't try and say that this was a carefully constructed plot on their behalf, ahem.  Well, ok, I don't think it is but I do think that they've been cheap and that their current plans to expand existing refineries won't solve our problems.\n\nDemand for energy will continue to grow (disproportionately here in the U.S...) and I really believe STRONGLY in seeking alternative sources of energy so that we can not only reduce costs for Americans (costs for living...crude oil costs affect EVERYTHING...prodution, shipping...driving up prices...costs to commute, etc.) but will reduce our dependence on foreign oil - doesn't get much better than THAT!!
329667
Gas will go up for this holiday weekend, more people travel more profits got nothing to do with supply and demand. Oil traded over $72 a barrel today. So get you gas before it goes up tommorow for the weekend.
605569
The p/e is very low because investors believe that the earnings are not sustainable. In other words, high oil prices will fall back to a more rational level--$40.00 a barrel. It may or it may not. If oil does not fall back, then the stock is indeed undervalued.  Investors are betting that it will.  The one thing that could cause a drop in the price of oil is a major recession.  World wide recession.  In that case oil copanies will not be the only ones with unsustainable earnings. \n\nI am betting that oil will not fall too much if at all.  If that is so COP is not the only undervalued oil company.
157891
China and India have drove the crude oil demand up.\nDemocraps and Environmental wackos have stymied oil exploration & refining.\nKatrina still has some of the gulf refineries not fully operational.\nEnviromental wackos have demanded numerous types of gasoline blends that add costs to the process.\nOPEC has not increased crude oil supply.\nThe federal and state gov'ts are getting 50 cents to 1 dollar tax on every gallon of gasoline.  \n\nAnd that's my 2 cents.
597278
It is a real concern, but whenever someone makes a prediction about when a country of the world will reach peak oil output, they do so with what then is considered a researve.  As the cost of a barrel of oil increases, sources for oil that were once not considered a researve then become on because at that cost it is economically viable to recover it.  With the recent spike in oil prices, North America can now clasify the tar sands in Canada and the oil shales in Colorado oil researves, and that being the case, it is estimated that in the US alone, we now have more economically recoverable oil then Saudi Arabia, the worlds largest exporter.  As the price continues to increase, other marginal sources will become economically viable.  Sooner or later, we will reach a point where there simply isn't enough oil available for any price, but that is still a ways off yet.  I believe that before we reach that point, oil will be more expensive then alternate fuel sources.  Through simple economics, I believe that people will begin using these alternate fuels simply because they are less expensive.  I believe that the high cost of oil will spawn invention and inovation into the energy sector, and I believe that has already begun.  We are working on increasing production of biodiesels and ethenol, and there is increased research into fuel cells and electric autos.  I think the future lies in hydrogen burning technology personally.  We already have engines that burn Hydrogen, but we're still working on the fuel tank dilema.  So, for a long answer, I believe that there is and will be time. I'm looking foward to being put out of buisiness.
518390
You didn't say "Whos" price.\nI suspect you meant the consummer.  But, there's a lot of people and governments which try to get a piece of that dollar you spend on gas(oline?)\n\nThe prime culprits are taxes, commodities speculators, and other countries.\n\nSo the real answer is "whatever the market will bear".\n\nIt makes no difference that oil companies may keep their costs at are below inflation - outside factors are pushing the "price at the pump" to the point where the consumer rebels..\n\n"What I did like in the story is the soundbite (phone interview) they had with the CEO of Exxon, who was quick to point out that they (Exxon) make about 10 cents profit per gallon, while 'big government' (my words, not his) makes at least 4 times that per gallon.".....\n\n"The problem is that NO ONE ever mentions, like I have before, that these billions in profits is only about 8% of their total income. That is actually one of the lowest profit percentages of all industries."
245685
Ok, maybe I would be a better person to ask this question since I actually work in the industry finding the stuff. Seems to me some people have made up they're own minds without much knowledge of the industry.\n\nAs one guy has pointed out, yes as it takes millions of years to from and the amount we have used thus far is greater than that being made naturally. \n\nHowever, what people fail to realise is that its the larger discoveries which for the past decade has been in decine due to the price of oil. As such, oil companies were reluctant to spend money in exploration because of the decreased profit they would make. Since Bush decided to invade Iraq, the oil price shot up and now exploration is booming. More discoveries are being made, and production is up.\n\nAlso as you have mentioned there are places which have yet to be discovered. I recently was working for a company which did an exploration well which they had been planning for 20 years! Long time planning if you ask me, but the reason it took so long was because the techonolgy avaliable was not around at the time to explore it. We can only explore within the capabilities of current techonolgy. Not only that there are vast areas of the world that have yet to even be siesmically survey'ed, for example the Pacific Ocean, big huge expanse of water, how long do you think it would take to map the sub surface geology?\n\nAs for your third part of your question, there is such a thing as extended reach drilling, where (as the name suggests) they drill long sections and could quite easily tap potential reservoirs without damaging sensitive environments. Such drilling goes on in the UK.\n\nAll in all no the oil is not running out, these next few years are going to see and peak in the production of oil since hte industry started.\n\nP.S. Removing the oil from the ground doesnt in any way shape or form cause volcanoes as the guy above me suggested, that is mearly ill' education!
275167
There is NOT a supply shortage. Even OPEC and Saudi Arabia are saying there's no shortage. They are saying the gas prices should not be anywhere near as high as they are. What's raising the cost is that oil companies are gouging everyone because they basically have a collective monopoly, even though they're supposed to be in competition with each other. That's why oil companies keep scoring record profits each year while average Americans are getting poorer.
163868
I started boycotting exxon-mobile 1st quarter last year. Exxon got huge PROFITS from the 42% PROFIT they get per barrel of oil.  Products from the oil, is marketed everywhere, gas, diesel etc. I believe that enough people boycotted one company, it could work, Boycot until the allowed profit is reduced. Legally they get 42% no matter what the price per barrel is. The state you live in can get as much as 28% tax. 12% profit is for distribution, the remainder is for the station. The world stability determines price of a barrel of oil. But we could force a company to NOT GET THE HUGE   PROFIT FROM A SINGLE BARREL. OR -----------BOYCOT WALMART- hurt a huge corporation and money will talk.........
165884
Oil profits are part of the reason for the wars AND the limited capacity of refineries. I wonder what progress could have been made in the development of alternative energy supplies with the billions that have gone down the drain in those wars.
89005
We are dealing with very very greedy people here.  The oil companies have been making record profits, while blaming the costs on things that never really affected their business.  They blamed the prices going up after the hurricanes, but the truth is, they were hardly hit!!!  It is sickening to me.  How can they have been hurt when they are making record profits???  It doesn't add up.  They sicken me.  It is disgusting that these compainies are not held accountable.  It is hurting our already poor economy.  It is hitting those of us who are the normal public the hardest.  All the while these business men are stuffing more wads of cash down their pockets, feeding the consumer lies about why they raised the prices.  I'm glad to know that someone else out there feels this is an important issue!!!