 |
|
|
|||||||||||
| HOME PAGE FOR THE WORLD'S BUSINESS LEADERS | |||||||||||||
|
|||||||||||||||||||||||
| |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
Home > Business > Services |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Energy
Cheering Big Oil's Slump NEW YORK - As a former Midland oilman, President George W. Bush must find it unnatural to root for a decline in the price of West Texas Intermediate crude. But a spike in oil prices could push the economy back into a double-dip recession, which is why today's weak earnings report from Exxon Mobil contained some good news for Bush--and for the rest of us.
This week the WTI stands at a touch over $27, amid fears that the festering Israeli-Palestinian conflict and possible U.S. action against Iraq might create disruptions that would push the benchmark past $30 again. That would be bad news for the fragile U.S. economy, which grew only 1.1% during the second quarter. Even at a relatively robust $26, the price of crude did not translate into impressive second-quarter earnings for the majors. Today's Exxon Mobil report disappointed investors, who bid the Dow Jones Industrial Average component lower after learning that the company earned $2.64 billion on revenue of $50.9 billion. That compared unfavorably to year-ago earnings of $4.46 billion on revenue of $56.2 billion. Royal Dutch/Shell also reported weaker-than-expected earnings today. BP (nyse: BP - news - people ), the third member of oil's Big Three, delivered similarly disappointing tidings earlier this week, as did ChevronTexaco (nyse: CVX - news - people ). Shell today said global refining overcapacity contributed to its earnings shortfall by cutting into margins. "The company is very dependent upon crude oil prices, refinery margins and the U.S. dollar, and all three worked against them in the second quarter," Lex Wekheim of Amsterdam's Eureffect brokerage told Reuters. Exxon Mobil sounded the same note in its earnings release, citing lower crude and natural-gas prices, unfavorable foreign-exchange trends and "significantly weaker refining margins" as contributors to its subpar quarter. "Refining margins dropped in most areas worldwide, with the sharpest declines in the U.S. and Europe," Exxon Chairman Lee Raymond said in a statement. Raymond's downstream earnings for the U.S. came in at an anemic $234 million, down $610 million from a year ago. The major oil firms traded lower this morning and dragged the broader market down with them. But investors looking for a silver lining might seize on the fact that at least West Texas Intermediate crude remained below its year-ago levels. That hurt the oil firms' year-over-year comparisons, but it's good for the overall economy. More From ForbesUnocal Faces Trial For Rights Abuses 07.12.02A judge asserts international jurisdiction in a way that may not make U.S. companies happy. Lower Prices Hurt Chevron's Quarterly Profit 04.25.02 ChevronTexaco posted sharply lower first-quarter earnings due to depressed market conditions. Energy's Eastern Front 12.24.01 Free registration required A desolate Russian island is set to sop up $45 billion of Western oil money.
2002 Tailgate Party Guide - 9/5/02 12:01:00 AM ET Our guide to the best places to stay and eat in all 32 NFL cities. Nick's Wine of the Week - 9/6/02 5:00:00 PM ET Skip that flabby Chard and uncork a Chablis from Olivier Leflaive. The Week Ahead: Sept. 9 - 13, 2002 - 9/7/02 12:00:00 PM ET Martha Stewart subpoena in the works; Kraft to unveil stadium; EchoStar's Ergen waits for Justice decision. Hires And Fires: Sept 2 - 6, 2002 - 9/7/02 12:00:00 PM ET Tilton takes over UAL; Satre to leave Harrah's Jan. 1; Centermann leaves ABB, Dormann in charge. Tennis Divas - 9/6/02 6:00:00 PM ET A look at the five women who rule the courts, headlines and earnings on the pro women's circuit.
 |
Oil Cheating For Fun And Profit Venezuela to sign early Deltana gas deals Friday Venezuela signs with five firms for Deltana gas deal Related quotes
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
|
|
Market data provided by Reuters. Disclaimer Stock quotes are delayed at least 15 minutes for Nasdaq, at least 20 minutes for NYSE/AMEX. U.S. indexes are delayed at least 15 minutes with the exception of S&P; 500 which is real-time. Forbes 40 Index powered by Telemet. News may include latest headlines from Reuters. |
|||
Forbes.com offers you access to some of the world's best investment advisors and commentators. Combine our helpful analysis with our useful investing tools to make the most of your investments.
