Oil companies’ refining profits come straight out of what we pay at the pump, so guess who paid for the across-the-board record refining profits that the major oil companies finished reporting today, with Chevron’s new records.
It wasn’t the French. Refining profits in the US were several times times higher than in Europe in the last quarter. US drivers are the cash cows of the industry. European drivers still pay more per gallon than Americans, but less of each gallon’s price is going straight in to the pockets of oil companies as profit.
Chevron’s quarterly refining profits, for instance, went up 41% in the US and only 16.4% in Europe.
Exxon made almost as much in 2nd quarter refining profits as it did for the whole year of 2003–$3.4 billion vs. $3.5 billion for all of ’03. It was refining profits that propped up its lower 2nd quarter profits in the oil-drilling part of the business.
All of the oil companies made more money in the quarter the by refining less fuel.
Today’s falling gasoline prices, even in the face of higher oil prices, are a relief, but not a permanent situation. Oil companies have pulled capacity in the US to such low levels relative to demand that gasoline prices follow gasoline supply. We’re just a refinery outage or two away from the next spike.
What to watch for: Will refiners use their newly stable capacity to fill up storage tanks through the lower-demand period of fall and winter? In the absence of a strong push from the government, don’t count on it. They’ve learned all too well that a tight rein on supply fills their coffers.