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Evil Oil Companies and thier profit margins

SgtRock

SgtRock

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Oil Companies are being demonized by many who do not understand economics, including president Obama. This last quarter Oil companies did well posting huge profits but thier profit margins are still substantially lower than many other industries. Most Oil Companies profit margins are between 6 and 10% with an Oil industry average around 8.3%. Compare this to Pharmaceuticals at 19% and Electronics as high as 44%. The truth is Oil companies are not ripping us off. The companies who manufacture your television are. So before you go off demonizing big oil do a little research.

Electronics industry rankings for the first quarter of 2011
Diversified Electronics Industry Gross Profit Margin Rankings

For comparison here is Oil industry profit margin rankings for the first quarter of 2011
Major Integrated Oil & Gas Industry Profit Margin Rankings

Here is an example. Out of 4159 companies oil giant Royal Dutch Shell is ranked 1691 with a profit margin of 6.74%. So are the 1690 companies who's profit margins are higher than Shell evil too? just asking......SgtRock

Here is the ranking of 4159 companies by profit margin.
Profit Margin Rankings
 
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SgtRock said:
Oil Companies are being demonized by many who do not understand economics, including president Obama. This last quarter Oil companies did well posting huge profits but thier profit margins are still substantially lower than many other industries. Most Oil Companies profit margins are between 6 and 10% with an Oil industry average around 8.3%. Compare this to Pharmaceuticals at 19% and Electronics as high as 44%. The truth is Oil companies are not ripping us off. The companies who manufacture your television are. So before you go off demonizing big oil do a little research.

Electronics industry rankings for the first quarter of 2011
Diversified Electronics Industry Gross Profit Margin Rankings

For comparison here is Oil industry profit margin rankings for the first quarter of 2011
Major Integrated Oil & Gas Industry Profit Margin Rankings

Here is an example. Out of 4159 companies oil giant Royal Dutch Shell is ranked 1691 with a profit margin of 6.74%. So are the 1690 companies who's profit margins are higher than Shell evil too? just asking......SgtRock

Here is the ranking of 4159 companies by profit margin.
Profit Margin Rankings
Click to expand...

Why does production naturally taper off when crude prices are high? Given the monopolistic nature of the petro industry, we should come to expect this.
 
Goldenboy219 said:
Why does production naturally taper off when crude prices are high? Given the monopolistic nature of the petro industry, we should come to expect this.
Click to expand...

I think you are being quite simplistic. Higher oil prices makes other energy resources more financially viable. They do not want to have people going with other options. At some point even solar has a lower break even point.

To answer the question it is because the rate oil can be extracted and refined and transported has finite limits. As those levels are reached it shows up in higher prices and eventually peak production is reached.

Speculators not behind oil price spike, says energy agency - Apr. 28, 2011 NEW YORK (CNNMoney) -- High oil prices are here to stay and they're caused by surging demand and limited new supply, not Wall Street speculators
 
Missed AB said:
I think you are being quite simplistic. Higher oil prices makes other energy resources more financially viable. They do not want to have people going with other options. At some point even solar has a lower break even point.

To answer the question it is because the rate oil can be extracted and refined and transported has finite limits. As those levels are reached it shows up in higher prices and eventually peak production is reached.

Speculators not behind oil price spike, says energy agency - Apr. 28, 2011 NEW YORK (CNNMoney) -- High oil prices are here to stay and they're caused by surging demand and limited new supply, not Wall Street speculators
Click to expand...

Please do not put me into the "speculators" boot camp. Even though U.S oil consumption has decreased by nearly 7% from 2005 levels, global consumption has increased by more than 3% since 2005 with a similar uptick in global supply.
 
Oil is one of the few commodities that has an impact on all other industry. When gas prices rise, the cost of everything, justifiably, goes up by a similar percentage and is compounded when goods reach the consumer.

I'm not saying that Oil companies are gouging.
 
SgtRock said:
Oil Companies are being demonized by many who do not understand economics, including president Obama. This last quarter Oil companies did well posting huge profits but thier profit margins are still substantially lower than many other industries. Most Oil Companies profit margins are between 6 and 10% with an Oil industry average around 8.3%. Compare this to Pharmaceuticals at 19% and Electronics as high as 44%. The truth is Oil companies are not ripping us off. The companies who manufacture your television are. So before you go off demonizing big oil do a little research.

Electronics industry rankings for the first quarter of 2011
Diversified Electronics Industry Gross Profit Margin Rankings

For comparison here is Oil industry profit margin rankings for the first quarter of 2011
Major Integrated Oil & Gas Industry Profit Margin Rankings

Here is an example. Out of 4159 companies oil giant Royal Dutch Shell is ranked 1691 with a profit margin of 6.74%. So are the 1690 companies who's profit margins are higher than Shell evil too? just asking......SgtRock

Here is the ranking of 4159 companies by profit margin.
Profit Margin Rankings
Click to expand...

You dont need a high profit margin if you dont pay any taxes.
 
Henrin said:
Sigh..disappointed
Click to expand...

Well am I wrong? If a company has less costs, then their profit margin does not need to be as high to meet the shareholders expectations. If they dont pay any taxes or very little, then that can be fed back to the shareholders.
 
Goldenboy219 said:
Please do not put me into the "speculators" boot camp. Even though U.S oil consumption has decreased by nearly 7% from 2005 levels, global consumption has increased by more than 3% since 2005 with a similar uptick in global supply.
Click to expand...

Why is it that so many here feel facts are not important when backing up assumptions?

International Energy Agency - Oil Market Report

dated: 12 April 2011

Global oil output fell 0.7 mb/d to 88.3 mb/d in March on reduced Libyan crude supply.

OPEC crude supply fell by 890 kb/d in March to 29.2 mb/d,

Higher anticipated post-earthquake Japanese oil use for power generation and reconstruction ...

OECD industry stocks fell by 50.8 mb to 2 676 mb, or 59.2 days, in February,

in Japan ... impact of a continuing loss of about 600 kb/d of refining capacity into 2Q.


It's called peak oil. At some point in the process there is a weak link, beit the ability to get it out of the ground, transport it, or refine it. As those limits are met, prices must go higher to curb demand. So when you ask the question, why is it that as output plateau prices start to spike... It has to do with supply and demand. I have a feeling you are aware of this, but for some reason do not want to accept oil as one of those commodities which has such natural laws effecting it's pricing.
 
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Missed AB said:
Why is it that so many here feel facts are not important when backing up assumptions?

International Energy Agency - Oil Market Report

dated: 12 April 2011

Global oil output fell 0.7 mb/d to 88.3 mb/d in March on reduced Libyan crude supply.

OPEC crude supply fell by 890 kb/d in March to 29.2 mb/d,

Higher anticipated post-earthquake Japanese oil use for power generation and reconstruction ...

OECD industry stocks fell by 50.8 mb to 2 676 mb, or 59.2 days, in February,

in Japan ... impact of a continuing loss of about 600 kb/d of refining capacity into 2Q.


It's called peak oil. At some point in the process there is a weak link, beit the ability to get it out of the ground, transport it, or refine it. As those limits are met, prices must go higher to curb demand. So when you ask the question, why is it that as output plateau prices start to spike... It has to do with supply and demand. I have a feeling you are aware of this, but for some reason do not want to accept oil as one of those commodities which has such natural laws effecting it's pricing.
Click to expand...

It was more of a rhetorical question.
 
Goldenboy219 said:
Why does production naturally taper off when crude prices are high? Given the monopolistic nature of the petro industry, we should come to expect this.
Click to expand...

spring is when they always do maintenance at the refineries
 
PeteEU said:
Well am I wrong? If a company has less costs, then their profit margin does not need to be as high to meet the shareholders expectations. If they dont pay any taxes or very little, then that can be fed back to the shareholders.
Click to expand...

They do pay taxes.

Taxes are taken out of profits.

As for your new argument no where does it say costs are lower now than they were before, so its a none starter.
 
Goldenboy219 said:
It was more of a rhetorical question.
Click to expand...

Your entire post was rhetorical? Talk about a nonstarter...

It was my understanding from your writing that you were blaming the "monopolistic" oil empires on artificially decreasing supply, or manipulating the price. I'm no sure which because you were unclear about it, maybe you can explain what it is that you are attempting to say then...

Do you or do you not believe that peak oil is a real effect? That there is a finite amount of production which can be reached at a given point in time? That oil becomes harder to get out of the ground the longer the field is in use, that there are only so many barrels of transportation available that the refining capacity is only so large, regardless of the total amount of the higher 2 of the 3 I listed, the total output is restricted to the lesser of the 3.
 
Missed AB said:
Your entire post was rhetorical? Talk about a nonstarter...

It was my understanding from your writing that you were blaming the "monopolistic" oil empires on artificially decreasing supply, or manipulating the price. I'm no sure which because you were unclear about it, maybe you can explain what it is that you are attempting to say then...

Do you or do you not believe that peak oil is a real effect? That there is a finite amount of production which can be reached at a given point in time? That oil becomes harder to get out of the ground the longer the field is in use, that there are only so many barrels of transportation available that the refining capacity is only so large, regardless of the total amount of the higher 2 of the 3 I listed, the total output is restricted to the lesser of the 3.
Click to expand...

Restricted supply is a problem, but it's not peak oil. Peak Oil would not cause prices to jump up as suddenly as they have. Blame speculation about the Middle East, the offshore drilling ban, speculation about price inflation, etc. Peak Oil is nonsense and we should not need to go into it yet again. It all relies on a faulty understanding of economics.
 
Henrin said:
They do pay taxes.

Taxes are taken out of profits.

As for your new argument no where does it say costs are lower now than they were before, so its a none starter.
Click to expand...

Wrong they raise price on consumers to cover that cost hence the consumers pay the taxes
 
ptif219 said:
Wrong they raise price on consumers to cover that cost hence the consumers pay the taxes
Click to expand...

So? That doesn't mean they didn't pay them, it just means in the end they weren't about to suck it all up.
 
Missed AB said:
Your entire post was rhetorical? Talk about a nonstarter...

It was my understanding from your writing that you were blaming the "monopolistic" oil empires on artificially decreasing supply, or manipulating the price. I'm no sure which because you were unclear about it, maybe you can explain what it is that you are attempting to say then...

Do you or do you not believe that peak oil is a real effect? That there is a finite amount of production which can be reached at a given point in time? That oil becomes harder to get out of the ground the longer the field is in use, that there are only so many barrels of transportation available that the refining capacity is only so large, regardless of the total amount of the higher 2 of the 3 I listed, the total output is restricted to the lesser of the 3.
Click to expand...

As any good capitalist knows, it's foolish to boost production at the first sign of increased profitability, especially when it comes at an expense. The transportation costs of petro are heavily dependent on the price of fuel (of course!), which means producers face the strain as well via opportunity costs.

So when you think about it, forgoing an increase production at this stage seems like a pretty good idea; that is if you are an oil producer (I'm not).
 
SgtRock said:
Oil Companies are being demonized by many who do not understand economics, including president Obama. This last quarter Oil companies did well posting huge profits but thier profit margins are still substantially lower than many other industries. Most Oil Companies profit margins are between 6 and 10% with an Oil industry average around 8.3%. Compare this to Pharmaceuticals at 19% and Electronics as high as 44%. The truth is Oil companies are not ripping us off. The companies who manufacture your television are. So before you go off demonizing big oil do a little research.

Electronics industry rankings for the first quarter of 2011
Diversified Electronics Industry Gross Profit Margin Rankings

For comparison here is Oil industry profit margin rankings for the first quarter of 2011
Major Integrated Oil & Gas Industry Profit Margin Rankings

Here is an example. Out of 4159 companies oil giant Royal Dutch Shell is ranked 1691 with a profit margin of 6.74%. So are the 1690 companies who's profit margins are higher than Shell evil too? just asking......SgtRock

Here is the ranking of 4159 companies by profit margin.
Profit Margin Rankings
Click to expand...

So because some rank on the bottom of the list that somehow negates the fact that oil is ****ing expensive as hell and breaks the backs of the already broken? And how is it that

You know - affordability is a key component in economic stability. But that fact seems to be missing from that blanketing statement in which the author tried to demonize those who are suffering just to drive to work.
 
Aunt Spiker said:
So because some rank on the bottom of the list that somehow negates the fact that oil is ****ing expensive as hell and breaks the backs of the already broken? And how is it that

You know - affordability is a key component in economic stability. But that fact seems to be missing from that blanketing statement in which the author tried to demonize those who are suffering just to drive to work.
Click to expand...

Wow, did he do all that? I thought he was just saying what their profit margins were and to tell everyone to stop demonizing them.
 
Goldenboy219 said:
As any good capitalist knows, it's foolish to boost production at the first sign of increased profitability, especially when it comes at an expense. The transportation costs of petro are heavily dependent on the price of fuel (of course!), which means producers face the strain as well via opportunity costs.

So when you think about it, forgoing an increase production at this stage seems like a pretty good idea; that is if you are an oil producer (I'm not).
Click to expand...

which leads me to believe we are approaching peak out put levels as there is.little spare capacity.
 
Missed AB said:
which leads me to believe we are approaching peak out put levels as there is.little spare capacity.
Click to expand...

Saudi Arabia is most likely reaching its peak oil production if it has not already. The quality of the crude it is producing is becoming lower with more sulfar. Reports I have read state the amount of water injection it is using is very high ( 40% of the liquids coming out of the wells is now water I believe). Canada`s production of conventional oil is decreasing
 
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