Wall Street analysts have now pegged the worth of Exxon Mobil Corporation at one half trillion dollars.
The $500 billion mark is based on this breakdown of Exxon’s wealth– crude oil production (45%), refined products (30%) and natural gas (25%).
The valuation should remind Congress of a few things:
1. A half trillion dollar baby doesn’t need subsidized diapers.
2. Exxon may complain about the high price of crude oil as a raw material cost driver for its high gasoline prices, but nearly half Exxon’s business is the production of crude oil, which is used in its refineries or traded on the open market. When crude prices skyrocket, Exxon does not suffer, it gains.
3. Exxon’s refining business is so healthy because the cost of production is so far below the price that can be charged at the pump. Crude oil, clean gas formulations, and ethanol costs are not driving high gasoline prices. Exxon’s ability to keep inventories low so prices skyrocket is what’s behind its success. Until Congress regulates the gasoline supply to ensure adequate refining capacity to meet motorist demand, Exxon will continue to make more money by making less gasoline.