Northbay Uprising - Information for the liberated zones of the San Pablo Bay

2011-07-30 "Chevron headed for a year of record profits; Oil company headed for a record year as gas prices rise" by David R. Baker from "San Francisco Chronicle "
[http://articles.sfgate.com/2011-07-30/business/29831981_1_chevron-quarterly-profit-brian-youngberg-oil-prices]
Buoyed by high oil and gasoline prices, Chevron Corp. on Friday reported earning $7.73 billion in the second quarter, putting the San Ramon company on track for what could be its most profitable year yet.
Chevron, the nation's second-largest oil company, made $13.94 billion in profit for the first half of this year, easily topping its previous record of $11.14 billion in the first half of 2008.
"We have strong momentum entering the second half of the year, and we remain well positioned to deliver long-term growth," said Executive Vice President George Kirkland in a conference call with Wall Street analysts.
Chevron's second-quarter profit, equal to $3.85 per share, represented a 43 percent increase from the same period last year. And it almost set a quarterly record at the 131-year-old company. Only in the third quarter of 2008, when oil prices hit their historic peak of $145 per barrel, did Chevron make more, earning $7.89 billion.
Oil prices haven't approached that level this year. But they have stayed high, trading between $95 and $110 per barrel on the New York Mercantile Exchange for most of the spring and summer. Strong oil demand in Asia and political upheaval in the Middle East have kept prices from falling. Crude closed Friday at $95.70.
"The rise in oil prices this time around has been much more steady than what we saw in '08, when it really was a spike," said Brian Youngberg, senior energy analyst with the Edward Jones investment company. "And even with all the concerns about the global economy and the budget deficit and everything else, oil is holding steady around $100."
During the second quarter, Chevron's sale price for oil in the United States averaged $104 per barrel, up from $71 during the same period last year. As a result, Chevron's profit grew even as its worldwide production of oil and natural gas slipped 2 percent, falling to 2.69 million barrels per day. The company's revenue for the quarter rose 30 percent to hit $68.95 billion.
Other oil giants also posted solid second-quarter profits this week. Exxon Mobil Corp. made $10.68 billion, a 41 percent increase from the same period last year. Royal Dutch Shell's profit nearly doubled, jumping from $4.39 billion in the second quarter of 2010 to $8.66 billion in the three months that ended June 30.
Rising profits may stoke the debate in Washington over ending some of the oil industry's tax breaks, an idea repeatedly pushed by President Obama and congressional Democrats. Chevron seemed eager, on Friday, to deflect that possibility.
Discussing the company's earnings with analysts, Chief Financial Officer Patricia Yarrington touted Chevron's contributions to the national economy, saying Chevron employs nearly 25,000 people in the United States and plans to invest $7 billion here this year.
"We're proud to be a part of an industry that is indispensable to economic growth and competitiveness," she said. "We look forward to working constructively under stable, predictable fiscal and regulatory policies to build a shared prosperity for America and for our shareholders."
For the moment, at least, the debate over oil company taxes has been sidelined in the fight over raising the federal government's debt limit. That fight poses its own risks to the industry. Should the government default and send the economy back into recession, oil prices could fall, just as they did in 2008. That's far from certain, but it remains a possibility.
"That's the biggest downside risk we see to prices right now," said David Kirsch, director of market intelligence for the PFC Energy consulting firm. "None of the sectors of the economy are really showing any strength."