At least some people are doing well with the high prices:
Exxon and Shell profits surge on higher oil prices
LONDON/NEW YORK (Reuters) Exxon Mobil Corp and Royal Dutch Shell Plc reported significantly bigger first-quarter profits and beat analysts' forecasts, helped by high oil prices and strong refining margins.
Profits for the world's biggest oil producers have surged as oil prices moved above $100 per barrel in the first quarter on unrest in the Middle East and Africa and growing global demand for energy.
Those profits come as U.S. oil companies face growing criticism for tax breaks they receive for pumping oil, even as the retail gasoline prices continue to spiral higher, reaching an average of $3.886 per gallon, up 35 percent a year ago, according to travel group AAA.
Exxon, the world's most valuable publicly listed company, posted a 69 percent increase in earnings to $10.65 billion, its biggest profit since the third-quarter of 2008, when oil prices last traded above $100 per barrel.
Alone among its Western peers, Exxon recorded an increase in production in the quarter, notching a 10 percent rise from a year-earlier to 4.82 million barrels of oil equivalent per day (boepd), helped by its takeover of U.S. natural gas company XTO last year.
Shell's earnings rose 22 percent to $6.9 billion, although asset sales pressured its oil and gas output down 3 percent to 3.50 million boepd.
Still, that decline was more modest than the 11 percent drop that BP Plc reported on Wednesday and 7 percent drop in ConocoPhillips's output.
BP has been selling assets to pay the more than $40 billion in liabilities it racked up from the massive oil spill in the Gulf of Mexico last year, while Conoco had been shedding assets to pare its debt load.
GASOLINE HEATS UP
Fatter profit margins at Exxon and Shell refineries that process crude oil into gasoline, diesel fuel and other products also helped their quarterly earnings, but Exxon mounted a robust defense aimed at distancing itself and the industry from rising gasoline prices.
A company executive pinned the blame for high crude prices on a weak U.S. dollar, unrest in the Middle East and growing demand from countries like Brazil and China.
"During the first three months of this year, for every gallon of gasoline and other products we refined and sold in the United States, we earned about 7 cents," Exxon executive Ken Cohen told reporters on a conference call.
"Compare that to the 40 to 60 cents per cents per gallon that went from gasoline consumers to the government (state and federal) in gasoline taxes," he said.
LNG BUBBLES UP
Shell, the largest shipper of liquefied natural gas, also benefited from higher LNG prices following the Japanese earthquake, which was expected to lead to higher LNG demand in that country as nuclear power is scaled back.
That LNG strength, plus a number of large projects coming on stream this year, sparked hopes that Shell could join Exxon and Chevron in raising its dividend payments to shareholders.
Exxon raised its second-quarter payout 7 percent on Wednesday, while Chevron boosted its dividend 8 percent.
Chevron is due to release its quarterly earnings on Friday.
Exxon also benefited from a jump in earnings from its chemicals arm, which recorded $1.5 billion in profits in the quarter. The company is the second-largest U.S. chemicals maker behind Dow Chemical.
"It looks like chemical was really strong," Phil Weiss, oil analyst at Argus Research, said about Exxon's earnings. "And production came in on the higher side relative to my expectations, especially gas."
Shares of Shell rose 0.7 percent to 2325.5 pence on the London Stock Exchange, while Exxon shares were off 0.5 percent at $87.35 on the New York Stock Exchange.