So, I think that Exxon needs to keep its story straight. All the time, I hear that the reason why I am paying upwards of $3.00 at the pump is that supplies are dwindling. Okay, I am no economist, but that makes sense.
However, explain this. Exxon Mobil’s profit is up 35%. Excuse me? But here is the item of interest that really makes me scratch my head:
In a surprise move, the company boosted its capital spending forecast for the year to $20 billion, citing additional exploration and production opportunities.
Now, I realize I am an idiot liberal-corporate-hater-socialist (or whatever you want to call me today), but if there is ADDITIONAL exploration and production, doesn’t the market demand that the price go down?
Any corporate apologist care to pull those nose out of their Ayn Rand novel and explain that one to me?
Last 5 posts by Jason
- Breaking News: Dell's customer service is horrifying! - December 23rd, 2008
- A Dell Computer Christmas Story... or... Are you really proud of your customer service? - December 21st, 2008
- This about... - November 5th, 2008
- What a wasted opportunity... - October 19th, 2008
- "Let me just say categorically I'm proud of the people that come to our rallies." - October 18th, 2008
{ 2 comments… read them below or add one }
Matt Singer 07.27.06 at 10:49 am
In theory, natural market problems can lead to extremely profitable opportunities. For example, a shortage of water allows for massive profits. Similarly, ticket scalping for a popular show can provide ample opportunity for people to get rich.
Scarcity combined with low production costs is an odd combination, but it occurs and can lead to truly excess profits.
The question, of course, is whether these windfalls should simply be accepted and the oil companies allowed to profit hand-over-fist. It’s a pretty decent case for windfall profits taxes.
Shane Mason 07.27.06 at 11:38 am
OK, so while not ’scientific’ I heard on the Daily Show last night that BP’s net profit was $55,000 PER MINUTE!
What suckers we are.