Hugs and Kisses From Exxon

Are you buying your gasoline from Exxon/Mobile? If so, then you are partially responsible for a 53% growth in their net income in the fourth quarter of 2010. Thank you from the bottom of their hearts. They'll be sending out thank-you cards on Valentine's Day.

We've all seen gasoline prices steadily climb the past 3-4 months and it is predicted that the increase will continue. Is it because of a shortage of supply? No. There's plenty of gasoline sitting in storage tanks all across the country. According to newspaper reports, global consumption of petroleum products increased during the last quarter and oil prices rose 12% to an average of $85.14 per barrel. Higher prices made production operations more profitable and increased demand boosted margins at refineries.

So, let's see.... when production is down for any reason then the price at the pump increases because of a shortage of product, making larger profits for the oil companies. And when consumption goes up, production increases to meet that demand and more gas is sold, making larger profits for the oil companies. Isn't that a win-win for them and a lose-lose for us?

Exxon/Mobil earned $9.25 billion ( yes, BILLION) in the last 3 months (yes, in 3 MONTHS) of 2010. That was it's most profitable quarter since the third quarter of 2008, when it set a record for quarterly net income by a publicly traded company of $14.83 billion.

All of that was a result of only a 2% increase of total world oil consumption. It's not as if the world was suddenly increasing it's oil demand by any large margin. Wouldn't the oil companies have loved it if demand increased another 1%!

Exxon increased production by 19% in that quarter. So they produced a lot more oil when they wanted to get a little bit of that extra 2% demand. Don't people in the world buy gasoline from other companies other than Exxon/Mobil? If they increased their production, which you can bet a quart of oil that they did, then wouldn't we have oil storage tanks sitting full all over the world?? They must have because Chevron, Conoco/Phillips and other companies reported vastly improved results. Chevron said net income soared 72% for the fourth quarter and Conoco/Phillips reported a 54% increase. So don't feel too sorry for them.

For the full year, Exxon/Mobile earned $30.5 billion in profits with an annual revenue increase of 32% to $383 billion. All that tells me is that someone is buying plenty of gasoline from Exxon/Mobile. If you are still one of their consumers then they thank you and adore you but don't ask for a discount because you're a loyal customer. If you stop by their corporate office they'll give you a kiss and a cup of coffee for only $2.

If you're like me and didn't give them one cent for their products then we can bend over and show the corporate idiots where they can give us our kiss....