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Economy Question

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Joe_Brogan
Posts: 360 - Karma: 11

Why are the stocks of big oil companies such as Exxon and Marathon going up when the price of oil has been going up?  I'm not expert, but I would've thought that oil companies profit margins would be reduced, since oil has become more expensive recently.  I need this answer for a project, thanks.

Crude oil above, companies below:

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May 9 2011 7:02PM
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PhilboydStudge
Posts: 3431 - Karma: 206
I'll give you a disclaimer in advance, I'm an idiot and know nothing about this. But wouldn't gas prices be going up in order to keep profits up? Although that wouldn't explain the rise, so I have no idea I guess and this was a worthless post
May 9 2011 7:06PM
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cultrara
Posts: 5147 - Karma: 46,849

yup

people "need" gas and they will keep buying it untill there is no more, even with the price rise

May 9 2011 7:08PM
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Mr.Turtle
Posts: 3690 - Karma: 96
demand goes up so price increases, since the price increased without the company doing anything it only means more profits. higher profits= more desirable stock to own?

i know its not really that much about demand and more about speculation as my understanding goes but whatever
May 9 2011 7:09PM
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Ian.Ham
Posts: 1688 - Karma: 1,154
The increase in price is probably due to the increased difficulty to get oil, because of the chaos in the middle east or whatever reason. And when the supply of a product decreases the price at which it is sold rises. So it doesn't mean the oil companies are necessarily making more profits but they certainly aren't making less.
May 9 2011 7:10PM
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All times are Eastern (-5)