While oil company profits are rising, the outlook is still cautious. Record crude prices this summer are translating into huge profits as BP and Occidental Petroleum showed on Tuesday. However, some energy companies are bracing for tougher times, keeping a closer tab on cash and cutting spending.
Oil producers are coming off a quarter during which crude prices reached an all-time high of $147.27. However, prices have since tumbled more than 50% and the global economic malaise has raised questions about energy demand at least into 2009.
Despite a 71% jump in third quarter profit, Occidental Petroleum said Tuesday that it likely would not increase capital spending next year from its current $4.7 billion level. refiner Valero Energy Corp., which also reported July-September results on tuesday, said it was scaling back spending by 33% this year and cutting its 2009 budget.
I think I heard on the news that ExxonMobile had made phenomenal profits such as $41 billion and paid $14.5 billion in taxes in 2007, the highest in corporate history on both categories. It is on track to smash both of those records for 2008.
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