From: "Robert Comer" 

> You just don't know anything about which you are pontificating when it
> comes
> to the oil industry Bob.

So you think.

> The chart you link is misleading or just plain wrong.  Maybe its charting
> GROSS Profit and not NET Profit.

Aye, it may be, but it may also be net -- complain to the DOE for not
labeling it correctly.

>I don't know what's wrong with it but
> here's how I know something is very wrong with it.  I lived in an oil
> industry town and state during most of that period.  During the period
> from
> 80-85, where that chart shows profits, every oil company in the state was
> losing money and almost every single one of them (the entire industry),
> except for the majors that had some cash reserves to survive, WENT
> BANKRUPT.

Sorry guy, I had relatives in the oil industry too, and what you're talking
about is domestic production, and yes, they went bankrupt because they
couldn't compete with overseas production, now isn't it odd that the big
oil producer US companies still make profits, no it's not, because they are
producing overseas, not here. (for the most part)

> Some majors were bought out by other majors as a result of their weakness
> during this period.  Profitable companies don't go bankrupt, so your chart
> has something very wrong with it.

It all comes down to where they got the oil...

--
Bob Comer


"Gary Britt"  wrote in message
news:439d9520$1{at}w3.nls.net...
> You just don't know anything about which you are pontificating when it
> comes
> to the oil industry Bob.
>
> The chart you link is misleading or just plain wrong.  Maybe its charting
> GROSS Profit and not NET Profit.  I don't know what's wrong with it but
> here's how I know something is very wrong with it.  I lived in an oil
> industry town and state during most of that period.  During the period
> from
> 80-85, where that chart shows profits, every oil company in the state was
> losing money and almost every single one of them (the entire industry),
> except for the majors that had some cash reserves to survive, WENT
> BANKRUPT.
> Some majors were bought out by other majors as a result of their weakness
> during this period.  Profitable companies don't go bankrupt, so your chart
> has something very wrong with it.
>
> Gary
> "Robert Comer" 
wrote in message
> news:439d7fba$1{at}w3.nls.net...
>> > Average corporate profits are around 11% Bob,
>>
>> I don't disagree, but that's definitely not the manufacturing sector
> (which
>> is where I'd put oil)
>>
>> >and oil companies profits are
>> > LESS than average on sales and less than average on invested capital.
>>
>> So?  That 7.5% is a heck of a lot of profit given how much money is going
>> through those companies.
>>
>> >Your
>> > smart enough to understand that  just because the profit number sounds
>> > large
>> > in absolute terms is irrelevant to whether the profits are
>> > "outrageous".
>>
>> I don't think I used the word outrageous, but given the circumstances, I
> can
>> understand how some might say that.
>>
>> >They have plenty of quarters where they
>> > lose money too Bob.
>>
>> I'm not so sure about that -- specific companies because of
>> mismanagement,
>> yes, but the industry as a whole, I haven't seen a sign of that.  They
>> wouldn't let that happen and are in a position to control the outcome.
> The
>> only time their profits can go down is when the gas/other oil products
>> get
>> too cheap, and all they have to do to stop that is to constrain supply.
>> (acting as a cartel -- it's not as if people can go elsewhere.)
>>
>> Anyway, here's a graph for the last from 1977 to 2002:
>>
>>
> http://www.eia.doe.gov/pub/oil_gas/petroleum/analysis_publications/oil_market
_basics/Ref_image_prof_rate.htm
>>
>> *no* negative profit regions for production, and only a couple of *very*
>> slight losses for refining.
>>
>> --
>> Bob Comer
>>
>>
>> "Gary Britt"  wrote in message
>> news:439d018b$1{at}w3.nls.net...
>> > Average corporate profits are around 11% Bob, and oil companies profits
>> > are
>> > LESS than average on sales and less than average on invested capital.
>> > Your
>> > smart enough to understand that  just because the profit number sounds
>> > large
>> > in absolute terms is irrelevant to whether the profits are
>> > "outrageous".
>> > The have many thousands of billions of dollars in invested capital and
> 7%
>> > return on that is a large number.  They have plenty of quarters where
> they
>> > lose money too Bob.  Your smart enough to know it isn't fair to only
> speak
>> > up when they have a profitable quarter.  Finally, a lot of their profit
> is
>> > paper only because of fluctuations in inventory values as the spot
> market
>> > for oil went up and then later (after the quarter closed went back
> down).
>> >
>> > If they made truly outrageous profits it would be reflected in their
> stock
>> > price which would trade at a far higher multiple of earnings than the
>> > average non-outrageously profitable corporation.  It doesn't because
>> > people
>> > who call profits and return on capital invested not on the basis of
>> > democrap
>> > class warfare lies but only on *reality* use *reality* as the basis
>> > picking
>> > the best stocks to invest their money.  If they saw *real* outrageous
>> > profits there would be more buyers and the price of the oil company
> stock
>> > would skyrocket to a higher than average price earnings ratio.
>> >
>> > Gary
>> >
>> >
>>
>>
>
>

--- BBBS/NT v4.01 Flag-5