The oil companies have another strange deliema with their stockholders. They are all divded up into different divisions for the different stages of supply; exploration, refining, marketing (wholesale), and retail (for the few companies that still own stores). The problem is that their profit is constantally shifting between the different divisions. For the last few years they have been making huge profits in 1 or more of the first 3 divisions depending how fast and how much crude prices change, some quarters even make retail look good (if wholesale prices drop quickly). For the last couple quarters exploration has been huge and refining, marketing, and retail margins have been tight (because not all of the increased crude price is being passed through the refining process, and they are selling less product). So, the oil companies are all trying to get out of retail, and they are looking at cutting people from marketing; just so those divisions don’t look bad to stockholders (even if the company made a good profit).

15-20 years ago they barely made any profit from the refineries, and most of the profit came from retail. Does it really matter which part of the supply chain made the profit last quarter, if a different one will make it next quarter? The companies that are really having problems right now are the refiners like Sunoco that don’t own any wells. So, they are stuck buying all their crude at these high prices, without the offset of profiting from their own crude. I think I read that Sunoco has lost money for 2 or 3 quarters in a row.