Oil > $72

[Phlegm]

Oil surged to a record high above $72 a barrel and it's not even summer yet. Get ready to pay through the nose for gas this summer.

[DangerPaul]

get ready for another year of record breaking profits by the oil companies and the government not doing anything to help the poor who cannot afford to fill their tanks

[Parv]

Get ready for more work offshore at $600/day and a nice bonus at the end of the year! Hell yeah!

Perks of being in the business I guess.

[DangerPaul]

http://news.moneycentral.msn.com/ticker ... 1&GT1=8008

DALLAS (AP) - A $69.7 million compensation package and $98 million pension payout to Exxon Mobil Corp.'s former chief executive and chairman Lee R. Raymond has some shareholders and economists asking, "how much is enough?"

"Some folks will ask the question, 'Is this more evidence of big oil taking an enormous windfall and retaining all the riches?'" said Mel Fugate, assistant professor for Southern Methodist University's Cox School of Business.

Exxon benefited from high oil and natural gas prices and solid demand for refined products en route to earning $36 billion last year. The company has defended its profits, saying that other industries have larger profit margins but oil companies' bottom lines stand out because they operate on a much larger scale.

Recent news of Raymond's payout and pension is stoking embers Fugate said had been starting to die out. But with gasoline prices again reaching $3 a gallon at the pump in some areas and big oil companies about to report first-quarter earnings in coming weeks, expect more fallout, economists say.

On Wednesday, Exxon reported executive compensation in a regulatory filing that showed Raymond receiving $48.5 million in salary, bonuses, incentive payments and stock awards.

His compensation package also included $21.2 million from exercising stock options, which the company stopped awarding in 2001.

His $98 million pension payout reflects 43 years of service. But he would have received nearly $17 million less had he retired just last year, according to the company's 2005 proxy statement.

In this year's proxy statement, Exxon defended the package by saying it rewards Raymond's "outstanding leadership of the business, continued strengthening of our worldwide competitive position, and continuing progress toward achieving long-range strategic goals." Raymond had been CEO since 1993 before stepping down at the end of last year.

Exxon added that Raymond's compensation is "appropriately positioned relative to CEOs of U.S.-based, integrated oil companies and other major U.S.-based corporations, particluarly in view of the long-term performance of the company and the substantial experience and expertise that Mr. Raymond has brought to the job."

Last year, Chevron Corp. Chairman and CEO David O'Reilly received a $1.55 million salary, $3.5 million bonus and $3.57 million in long-term compensation. He did not exercise any options, but owns options valued at just over $34 million, including exercisable options worth $28 million, according to Chevron's proxy.

Fugate, who specializes in executive compensation and management, said Exxon is sending a "very, very bad signal" by allowing Raymond to select the lump-sum payout.

"They are in very, very rich times, so on one hand they say, 'we can afford it,' but on the other hand they are taking an awful lot of heat because they've made too much at the expense of consumers. I'm surprised they are not being asked to justify that."

They will be at the company's shareholders meeting in Dallas on May 31. Several shareholders have placed resolutions on the agenda that, if passed, would put the clamps on some executive pay.

Shareholder Emil Rossi, author of one of the resolutions, says that although he's done well as a longtime owner of Exxon stock, he believes the executives are keeping too much for themselves.

"(Raymond) took over a good company," said Rossi, of Boonville, Calif. "He didn't bring it out from being a bad company, so his pay is clean out of reason. It's not because of his smartness."

Twice since November, big oil executives, including Raymond before his retirement, sat in Senate hearings defending their profits and deflecting accusations of gouging.

© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[Lyion]

get ready for another year of record breaking profits by the oil companies and the government not doing anything to help the poor who cannot afford to fill their tanks

Oil profits are fixed at 8% generally. The companies are not the root of the cost of higher oil prices.

[Tikker]

cars are a luxury, not a necessity

stop whining, and ride your bike

[Ginzburgh]

and for those people who have a long commute...

...I suppose you'll say:

Get a new job
Move closer to work

...because it's just that easy.

[Darcler]

Take the bus or train?

[The Kizzy]

We dont even have cabs in this city, no means of mass transport, and this is the largest growing city in the state

[Darcler]

Come on down to Dallas dear and ride DART

[Jay]

I just filled up my tank. Damn near 70 bucks.

[Darcler]

I only spend about $30 on bad days on my tiny Neon tank.

My mom spends 60 to 70 on her Silverado.

[Spazz]

The price of gas hurts. I think this is a problem and it makes me iRRitated that no one that can is doin anything about it. How much less money does your average american family have now days with what they are payin in gas?

cars are a luxury, not a necessity

Maybe where you live. No ride makes it real hard to make the whle job thing work ina lotta areas man.

[Spliffs]

Tikker lives in canada, he owns a team of sled dogs, obv. He'll start complaining when the price of Science Diet goes through the roof as others start catching on to his scheme.

[Spazz]

I thought he was a canadien couldnt recall.

[Gaazy]

my truck's got a 26 gallon tank, last time i filled from dead empty i think it was upwards of 70

[kaharthemad]

Also look at state and federal tax per gallon on that stuff. When you figure in the tax at the pump and the tax they hit the oil companies for you figure in about 1.00 per gallon.

[Tacks]

By Tom Doggett
Tue Apr 18, 4:53 PM ET



WASHINGTON (Reuters) - Amid record oil prices and soaring gasoline costs, Exxon Mobil's $400 million retirement package to its former CEO is a "shameful display of greed" that should be reviewed by Congress and investigated by federal regulators, Democratic Sen. Byron Dorgan (news, bio, voting record) said on Tuesday.

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Dorgan said he wants Exxon Mobil officials to appear at a Senate Commerce Committee hearing to explain how the corporation "justifies" giving its former boss, Lee Raymond, such a huge retirement package.

He also said the Securities and Exchange Commission should investigate the deal that "appears to shortchange" shareholders.

"There can be no more compelling evidence that the price gouging and market manipulation which has produced record oil prices is out of control, and is working to serve the forces of individual greed and corporate gluttony at the painful expense of millions of American consumers," Dorgan said.

Dorgan's criticism of Raymond's financial package came on the same day that U.S. crude oil prices hit a record high of more than $71 a barrel at the New York Mercantile Exchange.

Higher crude oil prices are helping to push of up gasoline costs. The Energy Department reported prices jumped 10 cents over the last week to a national average of $2.78 a gallon, up 55 cents from a year ago.

President George W. Bush said on Tuesday he was "concerned" about the impact high gasoline prices were having on families and businesses.

Exxon earned the wrath of many lawmakers when it reported more than $36 billion in profits last year as energy prices paid by consumers soared.

Dorgan said he will push to win passage of his legislation that would impose a windfall profits tax on big oil companies and rebate that money to consumers, unless the companies used their earnings to explore for and produce more energy.

"I think a sensible public policy would insist that the big oil companies either invest those windfall profits in things that will increase our own domestic energy supplies, or we should return some of that money to consumers," Dorgan said.

"Using them to drop $400 million dollars in the pocket of a big oil executive is simply unacceptable," he added.

Exxon Mobil has defended Raymond's retirement package, saying it was pegged to the rise in the company's profit and market capitalization that occurred during his tenure.

This is saying the CEO got a lot more than Paul's link. Not sure which is right but the bolded part caught my eye.

[Phlegm]

Most CEO compensations are tied to the companies' profit and, since exxon made a shit load of money, the CEO is going to get a big chunk.

[Narrock]

Further proof that U.S. oil companies hike up the price at the pumps for no reason other than to raise an already ridiculously-high profit margin. Anytime there's a hiccup in the Middle East, the oil companies here use that as an excuse to raise the prices again.

[Diekan]

You all need to realize how it all works. It's simple. The oil companies buy shit loads of oil when the price per barrel is low, stockpile it and then jack the prices at the pumps up when the price per barrel rockets.

There is NO shortage of oil people. The big pigs are simply fucking us in the ass to fatten their bottom lines.

Mark my words. At the end of this quarter you'll see record or near record profits from the oil companies.

It's all profiteering, period.

[mappatazee]

So the oil companies are all collaborating together then? None of them are competing?

[Diekan]

Ask yourself this. How much of a difference is there between gas prices of different stations? Where I live if the Exxon is selling it for 2.70 a gallon - the BP across the street is also selling it for 2.70 a gallon. If there was true competition between them we'd never see prices rise much above 2 dollars a gallon.

The problem is that most gas stations don't really make their money at the pumps. They make the bulk of their money from the shit they're selling inside. The cokes, pepsi, candybars and everything else. However, if we say true competition at the pumps the BP across the street (in the above paragraph) would be selling gas at lets say 2.65 a gallon, then the Exxon would lower their price to 2.60 and so on. We're not seeing that. Because there is no competition.

I don't believe for a second that there is any true competition that high up the corporate ladder. I do believe they're in bed together. ESPECIALLY big oil and auto.

Whether you all think I'm crazy or not. The fact is thre is no crisis, there is no shortage. These companies know the market well. They wait until price per barrel is "low" and buy tremendous amounts and stockpile it. When the prices rise they buy much much less, but the refining continues. They know the average American knows jack shit about how the market works, so they wait for the press to start spouting off about how high a barrel of oil is - then they take the oppertunity to jack their prices up through the roof - laughing all the way to the bank.

If that doesn't make sense then ask yourself this: if this wasn't the case then how could they be showing record profits ever time this happens. People drive more during the summer - people use more fuel all the away around more in summer. So, with usage going up, and if the companies are shelling out 20 dollars a barrel more and "have" to raise the price per gallon by up to a dollar or more per. Then how in the hell can they show RECORD profits at the end of the quarter?

Look at this way. Say you're making wigets. Say it costs you 5 dollars a piece to make and you sell them for 8 dollars a piece. The price of wood goes up so now it costs you 8 dollars a piece to make them. Ok, so you're going to have to raise the price of your wiget to 12 dollars a piece to continue making a profit right? Now with that said - there's no way you could suddenly be showing record profits UNLESS you've stockpiled wood BEFORE the prices shot up and are just using it as an excuse to pump your prices up.

There are times I hate capitalism. And as much as I hate to say it. It will be cause of our demise. Unchecked greed by big money corporations is more deadly to the future of this country than any terrorist organization.

[Lueyen]

Ask yourself this. How much of a difference is there between gas prices of different stations? Where I live if the Exxon is selling it for 2.70 a gallon - the BP across the street is also selling it for 2.70 a gallon. If there was true competition between them we'd never see prices rise much above 2 dollars a gallon.

The problem is that most gas stations don't really make their money at the pumps. They make the bulk of their money from the shit they're selling inside. The cokes, pepsi, candybars and everything else. However, if we say true competition at the pumps the BP across the street (in the above paragraph) would be selling gas at lets say 2.65 a gallon, then the Exxon would lower their price to 2.60 and so on. We're not seeing that. Because there is no competition.

You sort of refute your argument about competition in the same two paragraphs where you state it. The reason you are not seeing competition of the nature you are talking at the pumps is not due to lack of competition but due to what you stated in the first part of the second paragraph. The vast majority of the time, stations are barely breaking even on fuel, they don't have room in their fuel margin to run competitive pricing at the level you are describing. Their price fluctuation is not so much a result of competition, but due to their cost fluctuation. An average gas station is going to have underground tanks of 10 to 20 thousand gallons, and depending on their level of business they may be pumping 2 to 3 times that some days. The cost of fuel for stations can and often does change multiple times a day. If they are getting several deliveries throughout the day all the fuel loads can easily be at a different price. The real bottom line is though that the vast majority of the time, the best they can hope for is that thier profit margin on fuel will cover their expenses of pumping it, as you stated fuel is used as a draw to get the customers there to purchase store products. To give you an idea, fuel margins are generally tracked out to thousands of a cent, because that is how fine the line is. Their Gross Profit percent (fyi not the same as markup) generally runs between 30 and 40 percent on their store products, and is easily generally under 10 percent on fuel.

I don't believe for a second that there is any true competition that high up the corporate ladder. I do believe they're in bed together. ESPECIALLY big oil and auto.

This is somewhat true although their profits here tend to come well before fuel is even loaded at the local fuel racks and goes out to the local gas station. The thing most people don't realize is that the only thing that makes BP gas BP and Exxon gas Exxon is the additives added in at the time the fuel delivery truck is loaded. All the trucks draw off the same pipeline. Incidentally this is the reason that it is possible for any station to have water in thier fuel, because different types of fuel are separated by loads of water when they are pushed through the pipeline. What most people don't realize is that nearly every station has some water in their fuel tanks, although it usually settles on the bottom. If you see a fuel truck dropping fuel at a station, or even one just leaving DON'T buy fuel there unless you are going to wait an hour. When fuel is dropped into the tanks it stirs them up and the water that normally separates out at the bottom of the tank is for a time mixed in with the fuel, and hence goes into your vehicle. Where these oil companies do tend to make a profit is at the higher end selling large quantities back and forth on the open market (again well before it reaches the stations).

Whether you all think I'm crazy or not. The fact is there is no crisis, there is no shortage. These companies know the market well. They wait until price per barrel is "low" and buy tremendous amounts and stockpile it. When the prices rise they buy much much less, but the refining continues. They know the average American knows jack shit about how the market works, so they wait for the press to start spouting off about how high a barrel of oil is - then they take the opportunity to jack their prices up through the roof - laughing all the way to the bank.

If that doesn't make sense then ask yourself this: if this wasn't the case then how could they be showing record profits ever time this happens. People drive more during the summer - people use more fuel all the away around more in summer. So, with usage going up, and if the companies are shelling out 20 dollars a barrel more and "have" to raise the price per gallon by up to a dollar or more per. Then how in the hell can they show RECORD profits at the end of the quarter?

Look at this way. Say you're making widgets. Say it costs you 5 dollars a piece to make and you sell them for 8 dollars a piece. The price of wood goes up so now it costs you 8 dollars a piece to make them. Ok, so you're going to have to raise the price of your widget to 12 dollars a piece to continue making a profit right? Now with that said - there's no way you could suddenly be showing record profits UNLESS you've stockpiled wood BEFORE the prices shot up and are just using it as an excuse to pump your prices up.

The situation is not as cut and dry as you make it out to be. While you are not entirely incorrect there are some things that you do not take into account, and I think it's mainly due to the scope being a bit difficult to fathom. Take a few things into consideration. First they do have very large reserves, on the same hand though, there is a very large amount of capital backing up those reserves, money that could be gaining interest if it was not tied up in petroleum storage. Not only do they need to cover their operational costs, but realistically they need to cover a somewhat intangible cost in the money lost having that capital tied up in reserves and not making interest somewhere. As fuel price rises that also increases the capital behind their fuel reserves as they replenish them. Their profits in this "game" come not so much from your simplified widget example but from careful management of buying and selling based on an average cost over time. As you will not though, fuel cost is ever rising over time, as time goes on the capital backing these reserves never decreases, it is ever on the increase, their cost of doing business is ever rising. Also realize that many of our state to state restrictions on fuel contribute to the problem, (Arlos is gonna love this). One thing that would go a long way to keeping fuel pricing more stable, and possibly even lowering it would be to adopt a nation wide standard on environmental standards for gasoline. I see no realistic way to do so without making this standard the highest of any of the states. As it is now, if there is a shortage of fuel in one area (supply and demand dictates the cost will rise) areas with an abundance can not simply send fuel to that area, due to differences in what can be sold in each region. The pipelines between refineries are already there, the capability is there, but the differences state to state keep it from happening. While I do not disagree that the profits were extreme, I don't believe it's quite as bad as the general public sees it, and certainly not as simple as a basic economic model of widgets.

Many cite the reported profits last year and the knee jerk reaction is to support windfall taxes ect. Honestly I don't like the idea, while yes I think there is a problem with excessive profits, I don't think it is nearly as bad as it was made out to be, and I can assure you that the proposed windfall taxes as they were designed was not the answer. If you read the legislation proposed it was very open ended on what the government could do with the surplus after it had given some back to the public. Not all of the money taken by the windfall tax proposal would end up easing the burden on the public, additional revenue for the government was built in with no specific direction on where it would be spent. Asside from the idea of the government taking money because a company made too much (doesn't sound like capitalism to me), the push was trying to feed off a public out rage, and it was all really so the government could get it's grubby hands on more money. I'd feel more supportive of a windfall tax if built into it was a savings where interest was used to reduce national debt, and it was only tapped to bail out industries that were in trouble like say when the government bails out automotive or airline companies, at least then it's not the tax payer footing the bill, it's more like forced corperate insurance.

All and all though if you want to look for the real greed factor, if you want to pin the guilt of excessive greed somewhere, you need to look at the very source of much of it, and that is not Exxon, BP, Shell ect. It is OPEC, that is where the price fluctuation starts, that is where the shots are called, that is where the parameters for the "game" are set, and that is who is making the extreme profits, the ones you don't see because they don't report them.

Disclaimer: All of this is pretty much just a devious bullshit ploy to relate the Middle east directly to our pocket books, in a hope that the liberals who read this board will start to consider more support for our actions in the middle east in hope that it will slow that price meter on the pump down >:-)... yes the halo does sit on my horns. (and before any of you reply that you are not that self centered and greedy... yes I know this disclaimer was a joke)

[Spliffs]

Most americans have a hard time swallowing tens of billions of dollars in profit margins for the oil companies, when they are having to pay twice if not triple the prices they were paying ten years ago. Capitalism is a two way street, and many people don't like it when it works against them.

However, I think it's a problem with a solution, and eventually it will come to a turning point.

Whether it be alternate fuel sources, legislation on profits, etc - the US is too dependant on fuel to allow it to be exploited unchecked indefinitely. Of course - I have no idea what the breaking point is - 5 dollars a gallon, 10?