Thread: Big Oil Expected to Have Best Year Since 2008

Big Oil Expected to Have Best Year Since 2008

By CHRIS KAHN AP Energy Writer
NEW YORK April 26, 2011 (AP)

http://abcnews.go.com/Business/wireStory?id=13462560

The swift rise in oil prices should produce a windfall for the petroleum industry in the first quarter and set up its best year since 2008.

Exxon Mobil Corp., Chevron Corp. and ConocoPhillips are expected to report this week a combined $18.2 billion in first-quarter earnings, according to FactSet. That's a 40-percent increase from a year ago and just short of the $20.2 billion they earned in the first three months of 2008.

Bigger profits will certainly benefit oil company shareholders, including millions of people owning 401(k)s and pension plans. But for businesses and consumers, the increased cost of petroleum means rising prices for unleaded gas and diesel, as well as food, airline fares, shipping costs and other things.

Gasoline rose more than 53 cents per gallon from January to March as a rebellion in Libya threatened its oil fields and helped push oil from $91 to $107 per barrel. The national average for gasoline is close to $3.90 per gallon. For diesel, it's at $4.14.

This has stoked frustrations about the sluggish pace of oil exploration in the U.S. while adding weight to efforts by President Obama to end the $4 billion in subsidies that taxpayers give to oil companies every year.

While oil companies enjoy big profits, "you're paying near record prices at the pump," Obama said in his weekly radio address on Saturday. Last week he appointed a task force to look into manipulation of oil and gas prices.

In 2008, Exxon established quarterly and annual profit records for a public company — $14.83 billion in the third quarter and $45.22 billion for the year. Wall Street is calling for the company to make $40.71 billion this year, about $1 billion more than it made in 2007. Analysts currently expect Chevron to top its 2008 profit of $23.93 billion by about $840 million.

Oil hit a high of $147 per barrel in 2008. It settled Tuesday at $112.21, up around 23 percent for the year.

Experts say oil is rising for reasons beyond the companies' control. Reports show that global oil consumption rose to 88.02 million barrels per day in the first quarter, above pre-recession levels. That, and the loss of production in Libya, is making global supplies tighter.

A week U.S. dollar is also part of the problem. The Federal Reserve has kept interest rates low while pumping billions of dollars into the economy, effectively weakening the dollar versus other major currencies. Oil, which is traded in dollars, tends to rise as a falling dollar makes the oil cheaper for investors holding foreign currencies.

John Felmy. chief economist for the American Petroleum Institute, the chief lobbying group for the oil industry, said "China and other developing countries," are also contributing to higher oil prices. Consumers there are buying more cars even as Americans cut back on filling up their tanks.

Oil averaged $94.64 per barrel between January and March, compared with $78.89 in the same period last year. However, oil companies also were forced to pay for idled rigs and other equipment in the Gulf of Mexico because of a ban on drilling following the BP oil spill. Some were forced to evacuate workers from parts of North Africa this year as uprisings spread through the region.

BP, Royal Dutch Shell and Occidental Petroleum Corp. also will announce their first-quarter results this week.

Natural gas production is a bigger determinant of results than it was in 2008. Exxon and Shell have bulked up gas operations in North American following discoveries of large reserves. Unlike oil, natural gas prices remain low compared with three years ago. It's currently trading at $4.38 per 1,000 cubic feet. In April 2008, natural gas contracts fetched more than twice that.

Oppenheimer & Co. analyst Fadel Gheit said that companies like Exxon and Chevron can rely on oil production to drive earnings. But smaller players such as Apache Corp., Devon Energy Corp. and EOG Resources Inc. depend much more on their natural gas fields and won't come close to the profits of three years ago, Gheit said.

White House Releases Obama's Long-Form Birth Certificate
Published April 27, 2011

| FoxNews.com

http://www.foxnews.com/politics/2011/04 ... rtificate/

The White House has released President Obama's long-form birth certificate, saying the document is "proof positive" the president was born in Hawaii.

White House Communications Director Dan Pfeiffer said the administration decided to release the full document in response to mounting questions about the president's birth. He noted that what started as Internet chatter had moved into the national political debate and ended up being discussed regularly on mainstream news outlets.

He said the president believed the issue was becoming a "distraction" from major issues.


Read more: http://www.foxnews.com/politics/2011/04 ... z1KjHo3yVJ