Shell's profit soars to record $9 billion

Shell's profit soars to record $9 billion

edition.cnn.com

Royal Dutch Shell's has reported a 25 percent rise in first-quarter earnings, crediting strong increases in energy prices.

Shell's first-quarter profit has soared to $9.08 billion thanks to record prices for crude oil.

Europe's largest oil company said Tuesday its average selling price of crude oil leaped by 66 percent to over $90 per barrel from the first quarter a year ago.

That sent net profit soaring to a record $9.08 billion. Sales were up 55 percent to $114 billion

(visit the link for the full news article)


Related News Links:
zfacts.com
www.sfgate.com
news.google.com.br
209.85.207.104

Analysts say the performance was impressive.

Talk about shoving it in our faces!

Aren't oil prices rising because of demand outstripping supply? Should this not result in profits being stable?

Guess not...

(s)hell's first-quarter profit has soared to $9.08 billion thanks to record prices for crude oil.

Profits resulting from price increases of an essential commodity that is causing hardship and a global food crisis - is it ethical?



edition.cnn.com
(visit the link for the full news article)

Well of course it did...

Gas prices go up = profits up.
these crooks must be stopped!
We need a hero because we arent standing up for ourselves fast enuff...

[edit on 4/29/2008 by theBLESSINGofVISION]

Originally posted by theBLESSINGofVISION
Well of course it did...

Gas prices go up = profits up.
these crooks must be stopped!
We need a hero because we arent standing up for ourselves fast enuff...

[edit on 4/29/2008 by theBLESSINGofVISION]

Yeah - if you look in the Related News Links, "Profits realistic, oil execs insist" they seems to think that their profits are justified... (note google cache, the orginal artical was deleted )

[edit on 29-4-2008 by sobolwolf]

True they are making more due to the cost of oil rising, but it isn't their doing. What most people fail to realize (or admit) is that big oil companies DO NOT set the price of crude oil.

So who does set the cost of oil? Big Oil? OPEC?

At different stages of our history, they both did. Even today, the Organization of Petroleum Exporting Countries often influences prices by producing more or less crude oil, or by announcing it will raise or lower production.
Some people will never be convinced, but it's the petroleum market, with its volatility and sometimes crazy gyrations, that determines crude oil prices.

Big oil companies lost their power to control prices partly because of antitrust legislation, and mostly because OPEC began setting prices for its oil in the early 1970s. OPEC members took control of huge crude oil reserves when they nationalized the operations of companies like Exxon, Royal Dutch Shell, Mobil and Gulf. By the early 1980s, though, OPEC nations began losing control of pricing power and the market took over.

Every day, traders, buyers and sellers of oil, evaluate supply and demand, look at the outlook for oil producers and consumers, analyze political and economic risks, and look for any news that could impact the market, such as a hurricane heading toward the Gulf of Mexico. Using sophisticated mathematical models, the day's news, rumors and gut feelings, they bid crude prices up or down.

So let's not turn this into a "blame evil big oil" thread shall we?

reply to post by nyk537


Thanks for your interesting comment (starred), yeah I sortof thought this as well, but what about this link, how do you explain this?

Profits realistic, oil execs insist what about this then?

And this:
Also from hereOil Company Subisdies: $7 billion + 2.6 billion + ...

reply to post by sobolwolf


They may be breaking records in profit but everything is going up in price and their profit margin is too. They have to buy the barrels of oil that just keep rising, then they have to spend their profit to produce certain grades of oil for different states, then they have to deliver this oil to the customer and still pay all their employees.

reply to post by nyk537


A great truth, unrecognized by many. Oil pricing is set by the speculators in the international banking community themselves. Of course, that doesn't actually address the relationship between those organizations and the oil industry itself. By conglomerating the leadership in 'harmless' think-tank communities like the CFR, or enjoining them in a quasi-governmental activity 'a la energy policy planning' or the 'IMF' the specter of 'collusion' becomes much more apparent.

Their profits comes from he refining of the crude, still the prices we pay at the pump has not actually catch up with the prices of the crude.

We could be paying a lot more.

Still you don't see them spreading their wealth with the consumers in US in the way of incentives.

Also Bush is calling for congress to push the construction of more refineries instead to stop the incentives given to this oil corporations and help the consumer instead.

This will increased more the profits for this companies so actually they could be making a lot more.

You know, there's another way to look at this. If you do the math, Shell only had a 7.9% profit margin. They'd be better off liquidating the entire company and investing in mutual funds in the 12% range. We should be thankful that investors are still interested or we'd have no gas.

Originally posted by Solarskye
They may be breaking records in profit but everything is going up in price and their profit margin is too. They have to buy the barrels of oil that just keep rising, then they have to spend their profit to produce certain grades of oil for different states, then they have to deliver this oil to the customer and still pay all their employees.

Exactly. Not to mention the ever increasing and extremely burdensome fees and taxes imposed upon them by special interest groups for "saving the planet". The restrictions faced by oil companies and the extra expenses they have to incur have a lot to do with their rising cost as well.

Originally posted by marg6043
Still you don't see them spreading their wealth with the consumers in US in the way of incentives.

And why should they? They are a private organization just like any other company. Their main goal is to make money, as it should be. WalMart is a giant among corporations as well, but I don't see them spreading their wealth in terms of incentives or investing in quality American products.

reply to post by nyk537




What world are you living in?

Profits surge as production declines

When did gas prices start going up? Around 2006 right?

Record profits for 2006

But they kept going up - slowly:

Record profits for 2007

Now this year, prices have skyrocketed:

Shell and BP record profits

Shell’s net income in the first three months of the year rose 25 percent to $9.08 billion and BP reported its profit increased 63 percent to $7.62 billion. Shares of Shell and BP trading in London rose more on Monday than they have in at least two years. At BP, oil and gas production was unchanged at 3.9 million barrels of oil equivalent a day, the company said. Shell’s output remained unchanged at 3.5 million barrels of oil equivalent a day, though several recent events had disrupted production.

Who do you want people to blame? God? Someone's raping the public of their hard earned money, so who should we blame, if not the source?

They have the oil, they're making the money.


Signing your economic check over to the Saudis

ut how likely is it that the price of gasoline will hold steady, when it already shot up 8.8 cents in just the past week to $3.13 per gallon? Should prices rise to $4 per gallon in the next two months, bringing the average price for the first four months of the year closer to, say, $3.50 per gallon, then consumers will be paying about $1 more per gallon than in 2007. For the average U.S. household, that would be $381 more out the door in 2008 before the stimulus check even arrives. So, if you are a two-paycheck family with two kids, the $300 rebate you're expecting for one of your children will already have been sent to the Saudis (and other oil producers).

Crude oil has jumped up 57% since 2007

NEW YORK (Fortune) -- Crude's surge last week took its price to an eye-popping $100 a barrel. The rise comes on top of a 57 percent jump for 2007 and puts oil within reach of its all-time inflation-adjusted high above $102, hit back in 1980.

Higher than it has ever been, adjusted for inflation.

Consumerist explains gas prices and price gouging

Did you know that gas price gouging almost never occurs as prices rise? Rather, it's most often when dealers keep prices artificially high even as their costs fall.

Fixing The Price Of Gas

Oil companies set the price of gas at company-owned stations. What they say, goes. With lessee-dealers, the relationship is more complex.

Lessee-dealers are charged a 'Dealer Tank Wagon' (DTW) price by the oil companies. The DTW price is set either by the oil company's central or regional office, and is driven by both the spot and futures markets. Most importantly, oil companies determine the DTW price by looking at the prices of other stations in the market. This is why two stations with the same brand a block away from each other can have different prices.

Lessee-dealers can't negotiate a DTW price since they sign contracts with just one oil company that require them to purchase a minimum amount of gas. Oil companies allow dealers to sell gas at a slightly inflated margin to ensure a profit stream so the dealers can put food on their family's table. That margin can range from 3-10 cents per gallon.

Why don't dealers just raise the prices more, like 20 cents a gallon, so they can give their families even more food? Some do. If they're caught, you can bet anything the next DTW price will be higher, bringing their profit margins back to normal - only now, their gas is more expensive than their neighboring stations and they have a competitive disadvantage.

DTW pricing is the product of an exceedingly complex and secretive pricing scheme known as zone pricing. A zone can be as small as a single gas station, or as large as a city. The testimony of a Mobil representative in 1997 revealed that Mobil had 46 zones in Connecticut. Most dealers have no idea what zone they are in, even though the DTW price given to their neighboring stations can determine their standing in a local market.

Oil companies, like politicians reapportioning voting districts, rely heavily on technology to slice apart local markets. The DTW price in each zone will be different, taking account several factors including nearby competition, demographics, and the historical demand of the zone. Oil companies also seek to determine the price elasticity of each zone, or how much the zone will pay for gas before looking for alternative suppliers. For some zones, that breaking point is a penny, for others, it two or three cents, and some will stay with their station out of a sense of loyalty. These factors can cause the price of gas in neighboring zones to fluctuate by as much as a dime.

Oil companies adjust zone price by considering what their competitors are doing. The price of rival gas stations will be surveyed two or three times a week, or the data will be relayed to the oil companies by refiners.

[edit on 29-4-2008 by Sublime620]

reply to post by sobolwolf


Well, some of the article you posted kind of echoes the same sentiment I've addressed here. Although the oil companies are indeed making record profits, they are also losing record amounts of money into increasingly high tax rates and government sanctions. Another thing we often forget is that these companies are just that, companies. Their goal is to make money, just like any other store or business you may stroll into. Just because they make lots of money doesn't mean they have an obligation to pass it out to everyone.

The second part of that article, to me, highlights part of the reason why the oil situation has become as bad as it has. It seems as though Democrats in Congress believe that it is the responsibility of oil companies to invest in and fund the development of new energy technologies. Why do they think this?

If the government is so interested in developing new technologies to replace oil, shouldn't the government be the ones funding and investing in this? Why should a private organization be held accountable for something like this?

reply to post by nyk537


Excellent post, nyk537, and starred accordingly. It's nice to see the topic discussed instead of looking around for someone to conveniently blame.

Expanding on your post,

Every day, traders, buyers and sellers of oil, evaluate supply and demand, look at the outlook for oil producers and consumers, analyze political and economic risks, and look for any news that could impact the market, such as a hurricane heading toward the Gulf of Mexico. Using sophisticated mathematical models, the day's news, rumors and gut feelings, they bid crude prices up or down.

what are the current set of reasons that speculators are bidding prices up, and keeping them high? I don't mean to single you out for the answer; anyone is welcome to respond, of course.

Originally posted by Sublime620
They have the oil, they're making the money.

True, but they are not the ones telling you how much to pay for that oil. They are not the ones setting those prices.

Do you not think if they had their way they would opt for lower prices at the pump so they could sell more of their product? Do you not believe they would rather have lower prices so that they could get these towering government sanctions off their back, and reduce this rising antipathy people have towards their business?

You also seem to believe that we are in need of having someone to blame. I don't need to blame anyone for this.

However, if I had to start pointing fingers, I would begin with the environmental whack jobs who prevent us from harvesting the oil we have right here in our own country.

Yes, big profits. Justified? I'm not really sure that it's justified for the oil companies to profit quite as well as they are doing. But that's just me, coming from a consumer perspective.

Some interesting related articles on the web...

www.energybulletin.net...

OPEC said Friday it believed the world would need less oil from its 13-member group this year than in 2007 because global oil supply growth was set to outpace demand growth, particularly given signs that the U.S. was on "the brink of recession."

And going further digging into the "why" of our imported oil dependence:

www.heritage.org...

This is the lesson of the infamous windfall profit tax (WPT) on oil firms imposed under the Carter Administration in 1980 and repealed under the Reagan Administration in 1988. Then, as now, anger at "big oil" over high prices led to calls for a punitive tax. But according to the Congressional Research Service, "The WPT reduced domestic oil production from between 3 and 6 percent, and increased oil imports from between 8 and 16 percent. This made the U.S. more dependent upon imported oil." The tax hikes in the current bill have different names and operate somewhat differently, but the end result would be the same.

I'm no genius but it seems that when the government meddles, the people suffer, maybe not in the short term (though we did suffer under Carter) but definitely in the long term.

Both links are pretty good reads.

reply to post by nyk537


Sell more of their product? Are you serious? It's a necessity. When the price is raised, demand does not bottom out. People have to have gas. My girlfriend has to drive 30 minutes to get to work. I have to drive 20 minutes to work.

I cannot just say, "Well screw gas companies, I'm going to ride my bike 30 miles to work".

This isn't video games, computer parts, services, or any other luxury commodity, this is a necessity. There is a large difference.

And you're kidding yourself if you actually believe that Exxon isn't laughing their way to the bank with your cash.

*Edit:

Yeah, wackos. Then we'll have a bit more oil, and still be dependent on it. Great idea. How about we say screw the oil companies, and look in other directions?

Or is that "too green" for you? Can't be driving our hybrid electric cars that use synthetic fuel, while running of nuclear and solar energy. Then we wouldn't have a reason to stay in the Middle East.

What a shame!

[edit on 29-4-2008 by Sublime620]

let the facts straight

The oil barons in America are not losing anything.

]The Best Energy Bill Corporations Could Buy: Summary of Industry Giveaways in the 2005 Energy Bill

Thanks to the Bush administration generorsity at the expenses of tax payer this people are getting handsomely rewarded in our nation.

On August 8, 2005, President Bush signed into the law the energy bill; on July 28,the U.S. House of Representatives voted 275 to 156 to approve the energy bill; and on July 29, the U.S. Senate voted 74 to 26 to approve the energy bill.

This was under a majority Republican congress.

OIL & GAS SUBSIDIES: $6 BILLION

The corruption in our government financed by big oil companies.

Since 2001, energy corporations have showered federal politicians with $115 million in campaign contributions—with three-quarters of that amount going to Republicans. This cash helped secure energy companies and their lobbyists exclusive, private access to lawmakers, starting with Vice-President Dick Cheney’s Energy Task Force, whose report provided the foundation of the energy bill passed by Congress and signed by President Bush on August 8.

www.citizen.org...

Now that is what is going on in America.

reply to post by nyk537

Originally posted by nyk537
The second part of that article, to me, highlights part of the reason why the oil situation has become as bad as it has. It seems as though Democrats in Congress believe that it is the responsibility of oil companies to invest in and fund the development of new energy technologies. Why do they think this?

If the government is so interested in developing new technologies to replace oil, shouldn't the government be the ones funding and investing in this? Why should a private organization be held accountable for something like this?

Well, I would not like to see us have a public fuel agency. I would want to keep it in the hands of private investors.

But this is a nationwide issue, and one where, imo, the gov't has a duty to make sure that our economy is not crippled by the whims of some traders or mideast oil consortiums. That might include subsidies and tax breaks during the initial high-cost startup phases.

It's also good to keep in mind that some oilcos, like Exxon/Mobil, made record profits of $36 billion, but paid over $27 billion in federal income taxes in one year. That's more taxes than the lowest 50% of taxpayers, iirc. It's an amazing amount of taxes.