With Big Oil Stocks Riding High, It's Time to Take Profits

With Big Oil Stocks Riding High, It's Time to Take ProfitsExxon Mobil (XOM) shares are now selling near $87, just below where they were during the 2008 oil price spike, and the world's largest oil company is expected to post earnings per share of $2.25 when it makes its next quarterly report. That's up from an EPS of $1.33 last year. Chevron (CVX) and ConocoPhillips (COP) are also trading near multi-year highs. Even BP (BP) shares have done well recently, although its most recent earnings were helped by asset sales.

But it may be time to sell your shares in the big oil companies. They face a growing number of challenges which are likely to more than offset the rise in crude prices which have pushed their stock prices higher.

The most obvious source of risk to big oil stock values is that the price of crude could drop.
Brent crude is now selling above $120 a barrel. If demand slackens in China, or there's an increase in exports from OPEC -- particularly Saudi Arabia -- prices could go into a tailspin. Also, given that much of the current run-up has been blamed on the strife in Libya, Syria and other parts of the Middle East, if violence in the region settles down, fears about interruptions in crude production will dissipate.

New taxes may also threaten big oil's profits. Windfall profit taxes have been levied in the past, and President Obama recently suggested that Congress should repeal tax breaks for oil firms. Some Republicans are not convinced that's a good idea, saying that lowering profit margins at oil companies could cost American jobs. But oil company profits are an easy target for politicians. Americans are already deeply concerned about gas prices, and Congress will face an angry electorate in 2012 if gas remains high.

Oil stock values could also take a hit from increased costs related to oil exploration. High crude prices often lead companies to boost their exploration and drilling activities. However, since many of the untapped large reserves are in deep water or north of the Arctic Circle, the costs of attempting to exploit these new sources could be higher than in the past.

Exxon's share price is up 54% from its 52-week low. It's time to take profits.



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Dereck

Major Fraud Alert


The entire Federal Banking System under FirstGov has been "Consumed" and "Levied" by way of a Maryland State Circuit/District Court Ruled “Appropriation and Garnishment” of all Future Earnings prior to and after 2004 against Bank Of America by way of the F.D.I.C. Regulations Prohibiting failing Banks from Merging with other failing Banks between the Dates of 08/04/08 and 10/09/09.

Bank of America violated the 21st Century Act: Final Amendments to Regulation CC Section: http://www.federalreserve.gov/boarddocs/press/bcreg/2004/20040726/attachment.pdf

seeking reimbursement of Credit, Loan, and Finance Balances as a "Bank Entity" and not a "Nonbank Consumer" as specified on Pages 85 and 86.

The person they sued through a LLC. Debt Collection Company and Law Firm was the "World Fortune Owner" who "Counterclaimed" and won.

Now all Contracts of any Corporations (Including Employment) under the "Controlling Interest" of any Investment Bank Worldwide are "Null and Void", and are also under the stipulated Rules and Regulations of an "Closely-held S Corporation rendering all Employed under Legal Actions against “Domination”, and also means that "No Corporation can hold Shares" officially making every Stock Exchange on the Planet a "Ponzi Scheme" by default.

Businesses owned by the States (Public Corporations) are being sold Stock Shares by Corporations also under the Federal Banking System in this Worldwide "Ponzi Scheme". The World Fortune Company Merrick Inc. Sweden is dissolving Millions and Billions of Dollars from "All Levels of Government"in the U.S. of Financing based upon Years of "negligent inaction" involving this case.

The Federal Government has already been forced to discontinue supplying the Financing States use to pay their debts, Persons in Government Offices may want to begin to take their jobs more seriously, these are different times from 10 Years ago and you will not be accepted civil servants here just because you say you are here to do the right thing.

May 29 2011 at 12:04 AM Report abuse rate up rate down Reply
Gumby

All abroad aluminium stocks !

May 02 2011 at 1:18 PM Report abuse +1 rate up rate down Reply
1 reply to Gumby's comment
Gumby

Aluminium is dirt cheap , analysts never recommend metal stocks until they go up in metal prices and it is usually too late ! Aluminium is the LAST METAL for you to jump in.... The caboose of the train about to leave!

May 02 2011 at 1:18 PM Report abuse rate up rate down Reply
danielisticall

Solar vs. Oil
The industrial revolution was built on the back of oil and coal. There
is no denying that solar played no part whatsoever. This is
particularly true since solar cells were not invented until the 1950s!
That being said, it appears indisputable that we have reached or are
approaching a new debate about how we deal with our insatiable thirst
for power.
At first glance, the mere mention of a comparison of solar to oil as an
energy source sounds laughable. It is laughable when we are talking
about large scale energy production, but the tide is turning.
In a comparison of solar to oil, solar power has numerous advantages.
The power source for solar, the sun, is free. Solar is available as a
resource in every country, regardless of location, economic strength
and so on since the sun shines everywhere. The process of converting
sunlight into electricity or heating produces no greenhouse gases.
Whether you believe in global warming or not, solar still is
advantageous in that it doesn't produce pollution. If you live in a big
city, you know how much pollution is in the air. You can often see it
LET THE SAND SUCKERS EAT THEIR OIL AMERICA IS PLENTY SMART ENOUGH TO DO
WITHOUT THEM,,,WE CAN DO IT

April 30 2011 at 7:42 PM Report abuse rate up rate down Reply
1 reply to danielisticall's comment
jkennedy806

ATTENTION RESIDENTS OF THE COMMONWEALTH OF PA -- Talking to Deputy State AG yesterday -- he can not actively pursue my complaint individually, however, he can with a group of citizens. I have an out standing File open
against WELLS FARGO BANK. If there is anyone else out there who has been victimized by this bank, I would suggest you reply to me on this comment board -- I will be back and forth all day long. I found the way to rid ourselves of bad greedy corporations -- their bad consumer practices. If we lobby collectively ourselves the STATE has to hear US. Remember we VOTE THEM IN and we VOTE THEM OUT!!! Anyone can do this in their own state. And we can useuse these boards and the internet to band together and enact change. I am tired of being ignored and being financially raped by these morons.

April 30 2011 at 10:18 AM Report abuse rate up rate down Reply
1 reply to jkennedy806's comment
Robert & Lisa

The poverty rate has almost doubled since Obama took office. His real distribution of wealth plan was not from the rich to the poor as most assumed, but from the poor and middle class to the rich. With his ultra rich friends getting richer and we the people getting poorer, the facts speak for themselves. WHY IS NO ONE REPORTING THIS?

April 30 2011 at 7:48 AM Report abuse -1 rate up rate down Reply
1 reply to Robert & Lisa's comment
satnipp

The Windfall Profit Tax went into the general fund and what did it accomplish? No one could even tell where the money went - but that tax really hurt all the oil industry - in fact it really was the beginning of the down fall for not only oil & gas related companies but all the rest of the services that were build around that money - housing, service, banks etc. Let private industry deal with itself.
What other industry has had a Windfall Profit tax put on it? None

April 29 2011 at 3:29 PM Report abuse +1 rate up rate down Reply
caohellsux1978

And the author is the CEO of GolDAMN Nut Sachs? Or Exxon/Mobil? As we have seen time and again, supply/demand has very, very little to do with prices. Now when supply is down and demand is up, it has EVERYTHING to do with prices. However, when supply is up, and demand is down, it has more to do with those darned Nigerian Rebels attacking pipelines with blowguns, or Somalian Pirates hijacking tankers from row boats. Or maybe even the drying up of the world supply due to the conflict in Libya. Libya accounts for almost 3% of world oil. LOL, its laughable that we even talk about supply/demand any longer. We need to just come to the realization (even Exxon/Mobil) and just tell the world, I am gonna charge you whatever I wish to because you have no alternative but to buy it. I dont have to do the song and dance anymore, because I have got you right where I want you, in a state of helplessness. And yes, I may have to appear before Congress from time to time (wink,wink) but thats just a private jet ride away. A very samll price to pay in exchange for an 11 billion dollar profit in the first quarter of 2011. And guess what, its only going to get better for me, because my prices are steadily moving up, and there is nothing to stop me. I am Exxon/Mobil, and I am proud and arrogant.
BOYCOTT EXXON/MOBIL NOW THROUGH JULY 4TH. CUT INTO THEIR PROFITS, AND THEIR PRICES WILL COME DOWN. THEY ARENT GOING TO GET ANY LOWER AT THE PRESENT PACE. THE AMERICAN PEOPLE MAY NOT HAVE A CHOICE OF DOING WITHOUT RIGHT NOW, BUT WE DO HAVE A CHOICE OF WHO TO GIVE OUR MONEY TO.

April 29 2011 at 12:28 PM Report abuse rate up rate down Reply
caohellsux1978

The world's largest publicly traded company on Thursday reported net income of $10.65 billion, or $2.14 per share, in the first three months of the year. That compares with $6.3 billion, or 1.33 per share a year ago. Revenue increased 26 percent to $114 billion.

The results surpassed Wall Street estimates of $2.04 per share on sales of $112.6 billion, according to FactSet.

The quarter was Exxon's best since it earned a record $14.83 billion in 2008's third quarter. It comes at a time when some drivers are paying $4 or more for gas and President Obama is threatening the oil industry's multibillion-dollar tax subsidies.

Earnings grew across the company's business segments. Income from its exploration and production business gained 49 percent to $8.7 billion while the company's downstream business, which includes refineries, posted a huge 30-fold jump to more than $1.1 billion.

Anticipating a strong reaction to the results from drivers and politicians, Exxon said on a company blog Wednesday that it has little control over the price of oil, which has risen to near $113 per barrel. The company also noted that less than 3 cents of every dollar it earns comes from the sale of gasoline and diesel fuel.

Now, are you still going to blame the Middle East?

BOYCOTT EXXON/MOBIL NOW THROUGH JULY THE 4TH. BUY YOUR GASOLINE ANYWHERE BUT EXXON/MOBIL, OR ONE OF THEIR MOM AND POP STATIONS. BOYCOTT THEM, AND CUT INTO THEIR PROFITS AND THEY WILL HAVE TO LOWER PRICES.

April 29 2011 at 6:33 AM Report abuse -1 rate up rate down Reply
Stan

The California Energy Commission puts electricity produced by solar cells at $0.26/kWh, while natural-gas produced electricity is half of that.
Solyndra one of Obama's pet private companies makes solar panels! See if you can find ou how many emplyees they have! do know they are into their 7th year of losses! CAN YOU SAY SUBSIDY! I can but the Obama types call it investment= only problem is they are not investing to make a profit and they are not using their own money! Probably would not invest in this with their own money!

April 29 2011 at 4:03 AM Report abuse rate up rate down Reply