Exxon Mobil and other oil companies have made billions and billions of dollars. This is because the price of oil has gone up so quickly. During the past several months, oil firms have been raking in record profits despite the fact that many Americans have been having a difficult time affording gasoline, food and other basics.
On Friday, Exxon Mobil announced a record-breaking profit of $17.85 billion for the second quarter. Also, Chevron announced it had generated a record profit of $11.62 billion. The sky-high earnings were reported just one day after Shell broke its own record for profits in the United Kingdom.
Consumers are becoming increasingly anxious and rising energy costs have become a political hot point. Joe Biden, stated about a month ago that “Exxon made more money than God this year.”
Consumers are not just confronting high gasoline prices at the pump; rising energy prices are also being baked into the cost of delivery. This is driving up the price of everything from apples to toilet paper.
In the early days of the COVID-19 pandemic, when cities were sealed down and demand for fuel fell, the record earnings signified a startling turnaround from the situation that existed at the time. There were a great number of companies that went bankrupt, and thousands of people lost their jobs.
Exxon Mobil, others bag billions and billions of dollars as oil prices skyrocket
The market has historically been subject to cycles of both boom and bust. Prices may stay high for a long time because of the ongoing conflict between Russia and Ukraine. This has caused Russia to cut back on the amount of oil and gas it puts on the market. Also, on other supply problems around the world.
Mark Wolfe, described the situation as “terrible.” He went on to say that rising energy prices affected low-income families and front-line workers the most. “It’s devastating,” he said. You keep a low profile financially, and this is an additional $40 to $50 every week for you.
Wolfe advocates the imposition of taxes on energy firms by the federal government. This is in order to “redistribute part of those revenues back to the households that are struggling.”
The impact of inflation is already being felt in the places that Americans visit and the foods that they eat. Additionally, it alters the manner in which they use energy.
Two-thirds of American drivers adjusted their driving behaviors and lifestyles. The great majority of drivers prefer to travel less or combine errands. This was according to Andrew Gross, a spokesperson for AAA. The results of a poll done by AAA show that 2% of those who answered have bought an electric car since March.
According to Gross, “They have actually transformed their habits in order to cope with these exorbitant expenses.”
As crude prices remained over $100 per barrel, Exxon, whose headquarter is located in Irving, Texas, boosted its oil and gas output. Exxon’s revenue exploded to $115.68 billion, up from $67.74 billion in the same quarter of the previous year.
Natural Gas major supplier
The invasion of Ukraine by Russia and the subsequent imposition of sanctions against Russia, a major supplier of natural gas have contributed to an increase in the price of natural gas and liquefied natural gas (LNG), respectively.
A great number of European countries have been frantically searching for alternatives to the natural gas supplied by Russia. They have been fighting for boatloads of LNG. This has driven up costs for natural gas on a worldwide scale as well as in the United States. Inflation has also been going up in Europe, and as it has, prices for different kinds of energy have gone through the roof.
The recent surge in prices has been very beneficial for investors. This is particularly true for energy executives who earn a significant portion of their income in the form of firm shares. Experts anticipated that Exxon would make $4.02 per share, while the company actually made $4.21 per share. This is according to the results of a survey conducted by Factset. Analysts had predicted that Chevron would make $5.16 per share, but the company actually made $5.95 per share.
At the opening bell on Friday, shares of Exxon Mobil Corporation surged by 4 percent, while those of Chevron rose by 8 percent.
The chief executive officer of Exxon, Darren Woods, said that the company’s success can be credited to the investments it has made in oil and gas reserves in Guyana and the Permian Basin. Also, its investments in liquefied natural gas, which has been in high demand all over the world.
Woods stated that “given the long investment cycle periods, boosting supply will not happen quickly.” This was in a conference call on Friday.
Supply of Gasoline
The limited supply of gasoline around the world, the high price of oil, and the fact that there are fewer refineries in operation in the United States than there were before the pandemic all made the price of gasoline go up quickly during the quarter.
Through the expansion of its Beaumont Refinery, Exxon intends to boost its capacity for refining by about 250,000 barrels per day during the first quarter of 2023. According to the firm, this constitutes the industry’s greatest single capacity boost in the United States since 2012.
Exxon believes that fracking and unconventional gas in Germany have the potential to help solve Europe’s energy problem. Woods said, “It’s clear that ExxonMobil could play a very important role” in this effort.
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Additionally, Exxon intends to increase the quantity of LNG that it ships to European countries. According to him, the Golden Pass LNG export terminal that is now under construction in Port Arthur, Texas would bring about a twenty-five percent increase in the amount of LNG that is sent out of the Gulf Coast once it is operational in the year 2024.
“Bringing more LNG supplies into Europe to help balance some of the Russian gas moving into Europe will be another very essential step forward in diversifying supplies for Europe,” Woods said. “This will be an extremely important step in the right direction.”
Climate Change
Scientists who study climate change and those who live in close proximity to LNG export plants along the Gulf Coast have voiced concerns that growing infrastructure for fossil fuels might make natural catastrophes more severe.
Exxon thinks that oil-equivalent production in the Permian Basin will rise by 25% this year compared to 2021. Also, the company plans to stop flaring natural gas in the Permian on a regular basis by the end of this year.
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