fjasyr

3 Aspects to Pricing Oil

In May, another huge block of oil speculators came on board when the Dubai commodities market began trading in WTC sweet crude. Free of any transparency other than the numbers, NYMEX and other exchanges provide excellent cover for those who may be manipulating the market. Otherwise the US oil industry has great transparency with the Energry Department's statistics and analysis of the industry and the SEC which provides supplemental documents, especially 10-K reports that disclose much greater information about individual producers activities than the quarterly and annual reports.

I would like to add a fourth reason to the three you have provided regarding the current and future status of the oil markets -- the merger of Exxon and Mobil in 1999. Not since the breakup of Standard Oil Company by the Supreme Count in 1911, has one company been able to exercises monopoly-like influence on both the market for crude and the price at the pump as Exxon-Mobil. Considering that it takes a few years for consolidation of operations, productions and marketing strategy, the current volatility of the market appears to have emerged at the point on Exxon-Mobil's timetable when consolidation was completed and the oil company giant was capable of exercising its influence.

I suggest you go back to the time of the merger and read the comments by company officials and marketing gurus predictions of the company's times.

Exxon's 2007 Tax Bill: $30 Billion

If you read their 2007annual report, you come away with the impression that Exxon Mobil paid $29.8 billion dollars in US income taxes. That’s 42% of their net income before taxes. However, the percent that is actually US income taxes is less than the rate of payroll taxes deducted from a worker’s wages.

I suggest you examine all of the details of its financial statements that are fully disclosed in the Security Exchange Commission report (K-10) which the company is required to file. In the 2007 report, Exxon Mobil states it’s net income before taxes was $70,474,000 and while the company’s consolidated statement reported “income taxes” of $29,864,000, the breakdown reveals only $4,490,000 was actually US Federal Income Taxes. That represents 6.4%.of its total income before taxes. The remaining portion, after US state income taxes, amounted to $24,744,000 in foreign income taxes.

I hope that in the future you use all the resources available, including SEC and EIA reports that provide greater transparency than press releases put out by corporate PR departments.