Apr. 28, 2011
By ELIZABETH SOUDER
Exxon Mobil Corp. earned 69 percent more money in the first quarter than in the same period last year largely because of higher oil and gasoline prices.
U.S. average regular gasoline prices on Thursday hit $3.89 a gallon, a dollar higher than last year. Along with Exxon, several other Big Oil companies also saw fat profit increases because of higher oil and fuel prices.
“We’re proud of our profit,” Exxon vice president of public affairs Ken Cohen said on a call with reporters. But, he said, as usual, strong oil company profit invites political scrutiny. He spent half an hour defending the industry against possible tax increases, saying Exxon pays more to the U.S. government than it earns within its home country.
Exxon’s first-quarter earnings rose to $10.7 billion, or $2.14 a share, from $6.3 billion last year, or $1.33 a share. Revenue rose 26 percent to $114 billion.
That’s better than Wall Street analyst expectations of $2.04 a share, according to The Associated Press.
Still, Exxon Mobil shares slipped 44 cents to close at $87.34.
Exxon officials said they made more money this year because oil and fuel prices increased strongly.
Cohen said oil prices are up because demand for crude is higher as the global economy gets stronger. Also, political instability in some African and Middle Eastern countries makes oil traders nervous about future supply, and they bid up the price.
Further, the falling value of the U.S. dollar makes oil more expensive. Cohen pointed out that the dollar has weakened lately as analysts fret about U.S. debt.
He said taxing the industry more won’t cause prices to drop, and could have the opposite effect. Instead, he said, allowing oil companies to drill in more places would boost supply and possibly cause prices to decline.
“Whether we tax or don’t tax Exxon will not affect gasoline prices,” said Amy Myers Jaffe, associate director of Rice University’s energy program. She said that historically, crude oil at the current level corresponds to gasoline at the current level.
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