I must be in Bizarro World:
Nope, no surprise today in ConocoPhillips’ third quarter profit report… down some on lower refining profits, up some on higher oil prices. The net effect was a 5.2% drop from last year’s comparable period.
One interesting point in the report was that Conoco, unlike the rest of Big Oil, kept its refineries running at 97% of capacity in the quarter. Nationally, the figure was probably under 90%. The big question is whether Conoco and other refiners will cut back on making and storing gasoline in the next few months–which will determine pump prices next spring.
If refiners keep supplies low and try for the profit percentage they got last May (when regular gasoline prices hit a national record of nearly $3.25 a gallon with crude oil costing 20% less than it does today)… say hello to $4.50 pump prices.
That is the first time I have ever heard this “unbiased” organization say anything that was remotely complimentary about an oil company. Lo and behold, COP (unlike the rest of Big Oil) didn’t artificially hold refining capacity down. They must think keeping a refinery up and running is like keeping your corner grocery store up and running.
Refineries run 24/7, but they do come down for routine maintenance, and they come down when things break. A utilization rate of 97% is not sustainable over the course of the year. And if Oil Watchdog wanted to do a bit of investigative reporting, they could look at some related industries to see what utilization numbers look like. I can tell you that when I worked in the chemical industry, our utilization numbers hovered around 92%. We weren’t trying to keep capacity low, it’s just that things break and maintenance must be done. But Oil Watchdog thinks it’s a Big Oil conspiracy.
I have mentioned a couple of times the funny press releases they sometimes issue. The latest may be the funniest one yet. Keep in mind that this was self-issued by Oil Watchdog:
October 25, 2007
CONTACT: John M. Simpson,
310-392-0522, x317, or cell: 310-292-1902
Consumer Advocate Confronts Chevron Chief Executive Over Soaring Gasoline Prices With “Golden Nozzle Award”
Los Angeles, CA — Consumer Advocates from Oilwatchdog.org today confronted Chevron CEO Dave O’Reilly over soaring gasoline prices and presented him with a symbolic “Golden Nozzle Award.”
The “Golden Nozzle Award” goes to Chevron for sticking it to California consumers with continued price gouging at the pumps, the Foundation for Taxpayer and Consumer Rights (FTCR) said.
FTCR stressed that soaring gas prices are largely caused by a lack of refined gasoline, not rising prices of crude oil.
“Chevron controls the amount of gasoline they make and the company artificially lowers gasoline supplies to drive up gasoline prices,” said John M. Simpson, an FTCR consumer advocate. “When refinery utilization rates are cut, prices to consumers and Chevron’s profits go up. That’s why Chevron has not built a new refinery in 30 years.”
FTCR said government regulation of refinery supplies is necessary to control soaring prices and Big Oil’s huge profits. FTCR bestowed the Golden Nozzle Award on Chevron for:
– Chevron’s outlandish profits driven by excessive gasoline prices.
– The company’s leading role in funding the opposition to the development of alternative fuels through the failed Proposition 87.
– Chevron’s refusal to clean up toxic waste contamination in the Amazon despite ample profits to cover the cost.
O’Reilly spoke to Town Hall Los Angeles, a nonprofit organization promoting public policy discussions, on “Securing California’s Energy Future.” Simpson attended in order to present Chevron CEO Dave O’Reilly with a golden gasoline pump nozzle.
In the second quarter Chevron’s overall $5.38 billion profit was its highest ever for a single quarter, up 23.6% from $4.35 billion in the same quarter last year. Refining profits were up 41% in the US, to $781 million from $554 million. Chevron’s third quarter profits are due to be released next week.
The Foundation for Taxpayer and Consumer Rights is California’s leading non-profit and non-partisan consumer watchdog group. For more information visit us on the web at: http://www.consumerwatchdog.org/ and http://www.oilwatchdog.org/.
I swear I am going to start writing my own press releases. I mean, you create your own award, stalk the Chevron CEO trying to deliver it, and write a press release and then a diary about it. Is that over the top, or what? Oh, and as far as I can tell, they no longer allow comments there. The links to “Click to display or hide comments” no longer work.