Sunday, May 1, 2005

Big oil awash in big profits

Four biggest firms have earned $23 billion for the first three months of the year.

By Michael Liedtke / Associated Press

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SAN FRANCISCO -- Pumped up by persistently high energy prices, the oil industry maintained its streak of massive -- and growing -- quarterly profits last week, aggravating motorists and amazing financial analysts.

"I have been following this industry for 18 years and I have never seen anything like this," said Oppenheimer & Co. analyst Fadel Gheit. "It's like they're printing money."

The results of the world's four largest oil companies illustrate just how well the industry has fared lately. Since the end of 2003, Royal Dutch/Shell Group of Cos., BP Group PLC, Exxon Mobil Corp. and ChevronTexaco Corp. have earned a combined $97 billion, including $23.8 billion during the first three months of this year.

Although crude oil future prices retreated below the important psychological threshold of $50 per barrel Friday, Gheit and other industry analysts expect the industry boom to continue, largely because the demand for energy is expected to grow faster than the supply.

"As far as you can look out, things look pretty rosy for (oil) refiners," said Tom Kloza, chief energy analyst for the Oil Price Information Service in Wall, N.J.

The bottom line for consumers: U.S. gasoline prices seem likely to stay above $2 per gallon through the summer -- traditionally the time when more drivers are hitting the road for vacations and burning up more fuel.

Gasoline prices have climbed even higher since the oil industry closed the books on its first quarter, reaching a national average of $2.28 per gallon for unleaded regular grade last month.

The national average stood at $2.24 per gallon Friday, a 24 percent increase from $1.81 last year.