The Today Show (NBC-TV National)
KATIE COURIC, co-host: They say one man’s pain is another man’s pleasure, and it turns out the pain we all shared at the gas pump this summer brought an awful lot of pleasure in the form of big profits to the nation’s oil companies. NBC’s chief financial correspondent Anne Thompson is at an ExxonMobil station in New Jersey with more on that story. Anne, good morning.
ANNE THOMPSON reporting: Good morning, Katie. The run-up in oil prices this summer certainly was painful for drivers but very profitable for the oil companies. The numbers are just gigantic. This morning Wall Street is looking for ExxonMobil to report
profits of $8.6 billion for July, August and September, more than what’s expected from Microsoft, Boeing and Wal-Mart combined.
While American consumers have suffered through months of record-high gas prices, the oil companies have hit a gusher. This week BP reported third quarter profits of $6.4 billion, up 34 percent. ConocoPhillips raked in 3.8, an 89 percent increase. Big oil cashing in on worldwide demand and the disruptions of monster hurricanes. Why? Because their profit margins went up faster than their costs.
Mr. CHRIS EDMONDS (Managing Director of Research, Pritchard Capital Partners): We’ve gone from $40 oil to $60-plus in the last year. And so profits obviously were anticipated to be much higher. The — the real question here is: How long can that last and if it lasts, what are these oil companies going to do with — with those profits?
THOMPSON: It is a political hot potato. So much so, even Republican leaders this week fearing voter backlash urged oil companies to use their profits to build new refineries to prevent future price spikes.
Congressman DENNIS HASTERT (Speaker of the House): We expect oil companies to do their part to help ease the pain that the American families are feeling from high energy prices.
THOMPSON: Though the House passed a bill to encourage construction of new refineries, the plants that turn oil into gasoline and heating fuel have a huge public relations problem.
Mr. GARY ROSS (CEO, Pira Energy Group): Nobody wants a refinery in their backyard. I mean, that’s why most of the refinery capacity is located down in the Gulf Coast. That’s been a more accommodating market for them.
THOMPSON: But some, like consumer advocate Jamie Court, charge the oil companies deliberately keep the supply of gasoline low.
Mr. JAMIE COURT (Foundation for Taxpayer and Consumer Rights): An industry like the oil industry knows that if it just has bare minimum to meet demand, that any shock to the system will drive their prices and their profits up.
THOMPSON: Now the price of oil and the price of gasoline have come down in recent weeks. But news of these gargantuan numbers is sure to ignite the debate over how much is too much in a time of crisis? Katie:
COURIC: All right, Anne Thompson. Anne, thank you so much.
