October 28, 2005
Contrary to popular belief, the oil industry does not appear to have been hit that hard by recent hurricanes.
When Hurricanes Katrina and Rita hammered oil platforms in the gulf coast, it looked like the oil industry was suffering, but recent earning reports show otherwise. It may be hard to swallow after paying more than $3 for a gallon of gas in recent months.
"This is a record for the oil industry, it's a record I think for any publicly traded company in one quarter to make this much money," explained Bill Cheney, John Hancock Financial's Chief Economist.
In the mist of Hurricane Katrina during its third quarter earnings, Exxon Mobil pocketed nearly $10 billion, leaving local drivers feeling taken advantage of.
"You would want to think that people would want to help people out in a time of need, but not everyone looks at it that way, you know, they look at it as a chance to make a buck," said Chris Underwood.
"I feel bad about it because you know people shouldn't benefit from somebody else's disaster," added consumer Charles Cooper.
Hurricane damage meant Exxon Mobil's production actually dropped, but soaring prices lifted the oil giant's profit by 75 percent.
Experts believe those soaring prices at the pump are taking fuel out of the economy, by taking money out of consumers' pockets.
"In this particular situation with the price going up a lot, we're going to be quite a lot poorer," said Cheney.
Cooper said he's "disappointed, and still spending a lot of money in a car for gas. But what can I do?"
That sense of uncertainty is leaving many in a bind, and others quite skeptical.
"It definitely doesn't sound good on the surface," said Underwood.
In their defense, Exxon officials said their earnings aren't out of step with other major industries. Their quarterly profits turned out to be more than the entire movie industry's earnings at the box office last year.