Poor Exxon!

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So, I think that Exxon needs to keep its story straight.  All the time, I hear that the reason why I am paying upwards of $3.00 at the pump is that supplies are dwindling.  Okay, I am no economist, but that makes sense.

However, explain this.  Exxon Mobil’s profit is up 35%.  Excuse me?  But here is the item of interest that really makes me scratch my head:

In a surprise move, the company boosted its capital spending forecast for the year to $20 billion, citing additional exploration and production opportunities.

Now, I realize I am an idiot liberal-corporate-hater-socialist (or whatever you want to call me today), but if there is ADDITIONAL exploration and production, doesn’t the market demand that the price go down?






Any corporate apologist care to pull those nose out of their Ayn Rand novel and explain that one to me?

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J N

2 Comments

  • In theory, natural market problems can lead to extremely profitable opportunities. For example, a shortage of water allows for massive profits. Similarly, ticket scalping for a popular show can provide ample opportunity for people to get rich.

    Scarcity combined with low production costs is an odd combination, but it occurs and can lead to truly excess profits.

    The question, of course, is whether these windfalls should simply be accepted and the oil companies allowed to profit hand-over-fist. It’s a pretty decent case for windfall profits taxes.

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