When the price crude oil is at a record high, how are oil companies earning record profits?

I am talking about companies that buy and refine the oil not the companies that actually sell the crude. When the price of wheat goes up, you don’t see bakers making record profits so how do oil companies pull this off?

4 Responses to “When the price crude oil is at a record high, how are oil companies earning record profits?”

  1. E-vangelist Says:

    Because people aren't cutting back on buying it. Lok at SUV sales. Have they dropped? No. While driving do you see people driving more slowly to conserve? No. Until people slow their buying Oil companies will continue to make gret profits. Not sure I want the government controlling businesses though. It has to be done by supply and demand. Somebody needs to develop better alternatives and then we as consumers need to buy those alternatives.

    j

  2. do_u_hear_banjos Says:

    Hopefully some true republicans can shed light on this while the rest of us pay out the @SS for gas.

  3. Jonathan Pierre Says:

    profits are limited by cash flow time lags, and they aren't released every day with commodity price changes – just every quarter. remember – costs remain the same for the oil companies, they simply earn more revenue because the price goes up – you're probably thinking about refineries?

  4. wannabuildabikeguy Says:

    Well, to add to your question but not really answer it because I am not in the oil business. I don't think anyone in the oil business will answer your question. Who governs the oil co. ability to change prices. Is it done "at will" without regard for consumers? I've just recently heard about the new change (law?)government intervening when co. are thought to have "gouged" the consumer…THEN the gov. can step in….NOW WOULD BE A GOOD TIME, DON'T YOU THINK? And please, can someone explain to me why is it that diesel costs so much more that gas? When has that ever happened before? Diesel is LESS refined than gasoline! Let me put it another way: gas takes MORE refining than diesel! Same result! Are the oil co. afraid that people will convert to diesel vehicles & then convert the engine to run on peanut, potato or some other used oil that resturants dispose of, cutting oil co. profits? Picture the big oil co. meeting on Mon morn….Mr. #2 oil exec says: "Give me the report from last month….Hmmmmm, I see. Wasn't our goal this month to make record profits"? What can we do? Mr. #3 oil exec says: "I've heard people are thinking of going to diesel vehicles-better mileage & cheaper!" Mr. #1 oil exec says: "Well…we'll take care of that. "All in favor of raising diesel prices by 30-35%?–Yeaaaaa / all opposed?…(silence). Think about this, I am not by any means an accounting guru, but didn't I learn somewhere along the line, that when supplies are low, the price increases & the opposite is true, when the supplies are in abundence, the price drops? Conserving & reducing oil consumption is paramount, then 2nd let's think of the cost of shipping the oil. The closer the product is from pumping, refining & getting to our vehicles, this should reduce the cost…right? Well then….WHAT ARE WE WAITING FOR????? I myself do drive 55-60mph (in the outside lane. this reduces all the idiots from passing on the right & saves me gas) I have heard that for every 5 mph over 60, you can add .40 cents to each gal of gas used. We can never ( in my opinion) get completely off oil, but we need to find a "middle ground." Are you with me? Then let's gooooooooooooooooooo………….!!!!!!!