The combination of approximately 90 petroleum refining companies in the U.S. generate about $700 billion in revenue, include majors like Chevron (NYSE:CVX), ExxonMobil (NYSE:XOM) and BP (NYSE:BP).
Close to 60 percent of all refining capacity in the U.S. is held by the eight largest refiners, according to a report from Research and Markets.
The annual revenue generated by the industry is volatile, and dependent on the average price of oil throughout the year.
Surprisingly, location is a big factor in the competitiveness of smaller refiners, who can are able to go head to head with their larger competitors if they are run well and are in the right markets.
Specialty products is also a key element of the success of the smaller refiners.
Operational costs are relatively low because of the industry being largely automated, with annual revenue for each worker coming in at over $7 million.
Larger operations can and do compete on scale, although operational costs are important, as in all businesses.
Showing posts with label Refinery. Show all posts
Showing posts with label Refinery. Show all posts
Tuesday, September 14, 2010
Thursday, August 5, 2010
Murphy Oil (NYSE:MUR) Raises Dividend Eye-Popping 10 Percent
In what may point to a solid earnings report, Murphy Oil (NYSE:MUR) today raised its quarterly dividend 10 percent, to 27.5 cents a share. Annually that translates to $1.10 a share.
Shareholders of record as of August 16 will be paid the dividend on September 1, said Murphy.
Murphy, which recently said they're divesting of the refinery assets, along with 457 gas stations located in Britain, cited solid cash flow and rising production as the reasons behind the dividend boost.
Right before close, Murphy was at $56.91, a gain of $1.16, or 2.08 percent, as of 3:53 PM EDT.
Shareholders of record as of August 16 will be paid the dividend on September 1, said Murphy.
Murphy, which recently said they're divesting of the refinery assets, along with 457 gas stations located in Britain, cited solid cash flow and rising production as the reasons behind the dividend boost.
Right before close, Murphy was at $56.91, a gain of $1.16, or 2.08 percent, as of 3:53 PM EDT.
Thursday, July 29, 2010
Exxon Mobil (NYSE:XOM) Earnings Up On Refinery Margins and Oil Prices
In what appears to be a major story in the earnings' report season, Exxon Mobil (NYSE:XOM) was the latest of the oil companies to say refining margins were a major part of their earnings success, along with higher oil prices.
Consequently, earnings in the quarter surged 85 percent for Exxon, coming in at $7.56 billion, or $1.60 a share. That's up from the $3.95 billion, or 81 cents a share, in the same quarter last year.
Revenue soared to $92.5 billion, a 24 percent increase. Analysts had looked for revenue of $98.5 billion and $1.46 a share. The margin spread helped Exxon outperform in earnings even with lower-than-expected revenue.
The oil giant said oil production in the second quarter was 4.0 million barrels of oil equivalent per day, an increase of 8 percent over 2009.
Exxon made a major move to diversify their revenue and earnings by acquiring natural gas giant XTO Energy Inc. for $30 billion. That makes Exxon the largest producer of natural gas in the United States.
In the second half of 2010 they plan on ramping up drilling in the extraordinary shale gas fields in North America.
Consequently, earnings in the quarter surged 85 percent for Exxon, coming in at $7.56 billion, or $1.60 a share. That's up from the $3.95 billion, or 81 cents a share, in the same quarter last year.
Revenue soared to $92.5 billion, a 24 percent increase. Analysts had looked for revenue of $98.5 billion and $1.46 a share. The margin spread helped Exxon outperform in earnings even with lower-than-expected revenue.
The oil giant said oil production in the second quarter was 4.0 million barrels of oil equivalent per day, an increase of 8 percent over 2009.
Exxon made a major move to diversify their revenue and earnings by acquiring natural gas giant XTO Energy Inc. for $30 billion. That makes Exxon the largest producer of natural gas in the United States.
In the second half of 2010 they plan on ramping up drilling in the extraordinary shale gas fields in North America.
Sunday, January 25, 2009
Oil: OPEC Production Cuts
OPEC countries are under increasing pressure to cut oil production as oil prices aren't able to prop up the many countries so reliant on higher prices to take care of their needs.
It's not a stretch to say the leaders of oil producing countries will have their hands full as people start to get edgy over consequences of low prices.
In reality, there's not much OPEC and other oil producing countries can do about it, as the economic crisis has lowered demand for oil, and no matter how far oil production is cut, it's not going to get people to spend their money on gas they're not going to use.
Cutting oil production will only cause people to travel even less, undercutting the very strategy attempted by countries to prop up their crude prices.
If oil prices rise than there will be a high cost of oil that will sit there not being used, as people continue to save rather than spend their money.
Oil storage and reserves are growing while consumers hold back from buying, that isn't going to change for OPEC or oil companies. The oil industry can cut production, and it has already, but that won't solve the problem the market has already decided.
All that corporations and countries should do is get out of the way and let the market figure it out. Intervention into the oil market will cause unintended consequences as government interference always does, and only prolong the economic pain for everyone.
There is nothing driving the oil markets, prices, supply, costs, drilling and production other than consumer demand. Nothing can be done to change that until the economic crisis ends and then money flowing back into consumer goods and services.
The oil industry can only stand by and watch, cut cost, get leaner, and prepare for when the turnaround in the oil market comes.
This will be essential for the industry, as once demand rises, there will probably be a huge surge in buying as pent up demand explodes. Oil companies and refineries need to be ready for that time, as they'll soon forget the bad oil news of today and their profits will again surge ahead.
Oil exploration is another important factor in the mix, as there is plenty of oil out there, and the demand will come back stronger than ever as America, China and other nations will return to their insatiable appetites for oil that they had in the recent past.
So OPEC and oil companies just need to relax a bit. Yes there's problems related to low oil prices, but forcing the issue in attempts to artificially raise the price of oil above market levels never works.
We just have to wait out the tough times and wait for oil demand to rebound.
It's not a stretch to say the leaders of oil producing countries will have their hands full as people start to get edgy over consequences of low prices.
In reality, there's not much OPEC and other oil producing countries can do about it, as the economic crisis has lowered demand for oil, and no matter how far oil production is cut, it's not going to get people to spend their money on gas they're not going to use.
Cutting oil production will only cause people to travel even less, undercutting the very strategy attempted by countries to prop up their crude prices.
If oil prices rise than there will be a high cost of oil that will sit there not being used, as people continue to save rather than spend their money.
Oil storage and reserves are growing while consumers hold back from buying, that isn't going to change for OPEC or oil companies. The oil industry can cut production, and it has already, but that won't solve the problem the market has already decided.
All that corporations and countries should do is get out of the way and let the market figure it out. Intervention into the oil market will cause unintended consequences as government interference always does, and only prolong the economic pain for everyone.
There is nothing driving the oil markets, prices, supply, costs, drilling and production other than consumer demand. Nothing can be done to change that until the economic crisis ends and then money flowing back into consumer goods and services.
The oil industry can only stand by and watch, cut cost, get leaner, and prepare for when the turnaround in the oil market comes.
This will be essential for the industry, as once demand rises, there will probably be a huge surge in buying as pent up demand explodes. Oil companies and refineries need to be ready for that time, as they'll soon forget the bad oil news of today and their profits will again surge ahead.
Oil exploration is another important factor in the mix, as there is plenty of oil out there, and the demand will come back stronger than ever as America, China and other nations will return to their insatiable appetites for oil that they had in the recent past.
So OPEC and oil companies just need to relax a bit. Yes there's problems related to low oil prices, but forcing the issue in attempts to artificially raise the price of oil above market levels never works.
We just have to wait out the tough times and wait for oil demand to rebound.
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