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Oil Giant Produces Gigantic Profit

By Joe Benton
ConsumerAffairs.com

October 26, 2006
The world's largest publicly traded oil company delivered the second-largest quarterly operating profit ever by a U.S. company.

Exxon Mobil profits rose 6 percent to $10.5 billion boosted by strong oil production as crude prices hovered near record levels.

The third-quarter profit is better than expected and came during a period when U.S. oil prices hit a record high of $78.40 a barrel in early June. Oil prices spent much of the third quarter above $70 before retreating to around $60 as the summer driving season ended and geopolitical tensions eased. U.S. crude is currently trading at around $61 a barrel.

Exxon Mobil increased production roughly 7 percent to approximately 4 million barrels of oil equivalent per day during the third quarter.

Exxon Mobil Chief Executive Rex Tillerson said in a statement that earnings rose on higher realized prices for crude oil and natural gas as well as improved marketing and chemical margins. Those gains were partly offset by lower refining margins, Tillerson said.

Other big oil companies have announced increased quarterly earnings this week.

Royal Dutch Shell reported its underlying profit rose 21 percent and British Petroleum announced a 58 percent rise, helped by asset sales. Earnings rose slightly at ConocoPhillips as production problems restrained the company's earnings growth.

The decline of oil prices from sky-high levels has led a growing number of investors to suggest that the days of record oil company profits are nearing their end.

Exxon Mobil produced the largest quarterly profit as well when the oil company reported a $10.71 billion profit in the fourth quarter of 2005.

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