They just can't help it
Quote of note:
"It's like the gold rush," said Fadel Gheit, an analyst at Oppenheimer & Co. in New York. "It would be shame on them if they did not do what they did."
As oil companies reap the rewards of higher oil prices, consumers suffer. The average price for a gallon of regular gasoline was about $2.03 yesterday, 2 cents less than a record set in May, according to a AAA auto club survey. Diesel fuel prices have reached record highs for weeks. Home heating oil prices are far higher than last year. The prices do not reach record levels when adjusted for inflation.
Big oil companies have been using hefty profits to increase dividends, buy back stock and, in some cases, repay debt. The big companies have not significantly increased their budgets for exploration and development while some smaller companies have spent more, analysts said.
The larger companies say their refining operations have helped increase earnings, but the profit margins have narrowed from earlier this year. In addition, the oil companies' chemical businesses have been strong as they have passed along higher oil prices to customers, analysts said.
Oil Firms Report Big Profit Increases
Demand, Prices Create Windfall
By Justin Blum
Washington Post Staff Writer
Friday, October 29, 2004; Page E01
ExxonMobil Corp. and Royal Dutch/Shell Group yesterday reported large increases in third-quarter profits, part of an industry-wide windfall caused by high oil prices and strong demand.
Irving, Texas-based Exxon said its profit was $5.68 billion, up about 56 percent from the third quarter last year. Royal Dutch/Shell, based in London and The Hague, said that its profit more than doubled, to $5.4 billion.
Analysts said Exxon, Shell and several other oil companies that have reported earnings in recent days could not help but benefit from soaring oil and natural gas prices.
