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Started By
Message
re: U.S. Oil Refiners Are More Profitable Than Before The Pandemic
Posted on 12/15/22 at 12:40 pm to ragincajun03
Posted on 12/15/22 at 12:40 pm to ragincajun03
Crazy high demand including a war in Eastern Europe seems to drive revenue up. Who knew?
0
Posted on 12/15/22 at 12:45 pm to ragincajun03
Wonder what they did.
Spent most of my College and First Job being told refineries barely break even
Spent most of my College and First Job being told refineries barely break even
Posted on 12/15/22 at 12:52 pm to ragincajun03
I've been saying this for 18 months, and no one wanted to listen to me.
These companies work on margin percentage, and they can prety reliably pass on their costs.
Higher prices for oil = higher profits for refiners.
If oil is $50 and my margin percentage is 10 percent... I'll sell it for $55.55 and make $5.55.
If oil goes up to $100 I'm still keeping my margin at 10 percent... but now I'm selling it for $111.11 and making $11.11.
Oil companies are making money because they can... becausw they have a product in high demand with not a lot of competition.
Which is their right and good for them.
But spare me this "oh, the poor oil companies, they are just trying to stay alive" nonsense.
These companies work on margin percentage, and they can prety reliably pass on their costs.
Higher prices for oil = higher profits for refiners.
If oil is $50 and my margin percentage is 10 percent... I'll sell it for $55.55 and make $5.55.
If oil goes up to $100 I'm still keeping my margin at 10 percent... but now I'm selling it for $111.11 and making $11.11.
Oil companies are making money because they can... becausw they have a product in high demand with not a lot of competition.
Which is their right and good for them.
But spare me this "oh, the poor oil companies, they are just trying to stay alive" nonsense.
Posted on 12/15/22 at 12:57 pm to ragincajun03
they are more profitable because they are not investing in new drill sights and R&D. They aren't spending on pipeline.
They are not investing in new facilities or hiring and training.
just because the bottom line currently looks healthy, doesn't mean every thing is sunshine and roses.
They are not investing in new facilities or hiring and training.
just because the bottom line currently looks healthy, doesn't mean every thing is sunshine and roses.
Posted on 12/15/22 at 1:38 pm to offshoreangler
quote:
Yes...ConocoPhillips does not refine clean products...they spun the midstream and downstream portion off in 2012, now Phillips 66.
Ok yea knew the names changed at refinery but didn’t know they split everything
Posted on 12/15/22 at 1:53 pm to Rebel
quote:
they are more profitable because they are not investing in new drill sights and R&D. They aren't spending on pipeline.
They are not investing in new facilities or hiring and training.
quote:
top U.S. refiners
The companies referenced in the OP are not O&G producers. They don’t have drilling operations. Marathon Petroleum, Valero, and P66 are all pure downstream companies.
Posted on 12/15/22 at 2:05 pm to lostinbr
quote:Yeah, seems a lot of posters in this thread are having difficulty separating upstream and downstream operations.
The companies referenced in the OP are not O&G producers. They don’t have drilling operations. Marathon Petroleum, Valero, and P66 are all pure downstream companies.
Here’s a LINK to MPC income loss data. MPC was spun off 2011. They were profitable (~3B) every year with the exception of 2020.
Posted on 12/15/22 at 2:09 pm to ragincajun03
In this country we should never pay over $2.00 for a gallon of gas. And the oil companies would still rake in profits….,
Posted on 12/15/22 at 2:09 pm to ragincajun03
Gas in Cholula is 19.99 pesos btw. Just pass by a Shell Station here.
Posted on 12/15/22 at 2:30 pm to dukke v
quote:
In this country we should never pay over $2.00 for a gallon of gas. And the oil companies would still rake in profits….,
$75/bbl crude today
Divide by 42 gallons per bbl
$1.80/gal is crude
Need to subtract:
Capitalized costs to get crude from ground
To market or refinery
If refinery, crack spread (wholesale price - manufacturing costs)
Transportation from refinery to terminal
Distribution from terminal to retail site
Depends on who owns site (oil company, retailer, wholesaler, etc).
Overhead (salaries & burden, marketing, IT, etc)
Depreciation
Then! Profit.
Don’t feel sorry for oil companies
But don’t ignore full cost and risk picture before making premature windfall conclusions
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