Big Oil smashes profit records

ExxonMobil just posted quarterly earnings that were incredibly strong (not surprisingly), but I wanted to highlight a few things that are interesting and, for folks not sectors highly dependent upon commodity prices, are likely non-intuitive. Document available at: https://lnkd.in/gSJ9d3us •Year-over-year, revenue increased 70.8%. Figures like that aren't something that occurs in industries where pricing is more stable (think something like an electronics store or furniture store). However, that is the name of the game in oil refining. •The price of crude oil and products purchased increased 75.8% year-over-year. •Income before income taxes increased 295% (to $24.9 billion from 6.3 billion). •The rate of profit before income taxes increased from 9.3% in 2021 to 21.6% in 2022. •Is this price gouging? My answer: the story is complicated. This is an absolutely gangbuster quarter, but as I noted earlier, the price of inputs increased more than revenue. What happened was Exxon was able to arbitrage on the fact their production costs, SG&A, etc. didn't increase by the same proportion as the selling price of their products. Implication: the major oil refiners are posting phenomenally strong Q2 results. I'm sure there will be a robust debate about whether such profits are reasonable, but that is a different debate. #markets #supplychain #supplychainmanagement #shipsandshipping #freight #trucking #truckingindustry

😡 I know big corporations are legally obligated to act in the best interest of their shareholders, but when is enough enough? Where do they draw the line? https://lnkd.in/gvdwdZ6A

ExxonMobil just posted quarterly earnings that were incredibly strong (not surprisingly), but I wanted to highlight a few things that are interesting and, for folks not sectors highly dependent upon commodity prices, are likely non-intuitive. Document available at: https://lnkd.in/gSJ9d3us •Year-over-year, revenue increased 70.8%. Figures like that aren't something that occurs in industries where pricing is more stable (think something like an electronics store or furniture store). However, that is the name of the game in oil refining. •The price of crude oil and products purchased increased 75.8% year-over-year. •Income before income taxes increased 295% (to $24.9 billion from 6.3 billion). •The rate of profit before income taxes increased from 9.3% in 2021 to 21.6% in 2022. •Is this price gouging? My answer: the story is complicated. This is an absolutely gangbuster quarter, but as I noted earlier, the price of inputs increased more than revenue. What happened was Exxon was able to arbitrage on the fact their production costs, SG&A, etc. didn't increase by the same proportion as the selling price of their products. Implication: the major oil refiners are posting phenomenally strong Q2 results. I'm sure there will be a robust debate about whether such profits are reasonable, but that is a different debate. #markets #supplychain #supplychainmanagement #shipsandshipping #freight #trucking #truckingindustry

Who leads global oil🩸production? All eyes 👀 are on international companies as Exxon, Chevron and Eni join today Shell and Totalenergies in record profit 💰 results. But those companies make just a fraction of a global #production that is - by far - dominated by USA 🇺🇸 thanks to its #shale boom, with OPEC plus countries following by distance Very nice infographic from Visual Capitalist 👇 #oilgas #energy #money #security #policy #sustainability #innovation

Chevron, among its peers posted record high profits in Q2 of 2022. Firming up its balance sheet by reducing its debts seems like a good move. Investors can expect future share buy backs to increase shareholder value - reduce EPS and lower P/E. Appearing more profitable and less expensive.

The price at the pump was much higher than costs justified. Gouging is the word most often used for the tactic. The industry complained about supply not being sufficient and the need for pipelines and other infrastructure. The record profits are not being reinvested but returned to shareholders because the complaints were fabricated to cover artificially high prices. "Despite the record profit, Chevron signaled it will stick with relatively conservative spending plans in the oil patch and focus on returning more cash to investors and bolstering its balance sheet."  #infrastructure #oil #inflation

We are all in a very complex situation now: Energy prices are on the rise, so is inflation, a recession is coming and there will be rationing of energy in Europe while we all prepare for what will hopefully be a mild winter. At the same time, oil companies have never earned more money than now, but they can’t re-invest capital in exploring for more energy (which has been under-financed for the last many years) due to ESG and the political climate, and a narrative that investments in oil and gas must end. With the war in Ukraine and efforts of EU energy independence from Russia, there will be a supply >< demand issue that will be felt by all of us over the next few years. In such a complex situation, you need solid insights - and I can warmly recommend you to follow Amrita Sen and her crew from Energy Aspects for the latest updates and healthy perspectives 👇🏼 #energy #geopolitics #energysecurity