The laws of profit and loss are simple. If you sell more goods or services, you make more money. If you sell less, you make less.
So why, in a world where we are supposedly facing an oil shortage, are oil companies making record profits? It’s all hype, and it’s all just crap designed to make powerful people more money. This week it was Shell (see main link on title). Even better – the first paragraph (at least, at the time of writing) says that Shell needs continual price rises, otherwise it will suffer a loss in profits. Aww, boo bloody hoo.
There are other examples from around the world of profits increasing over the last 12 months, occasionally even because oil output has increased:
Indian Oil Corp: 17% profit rise[1]
Shanghai Petro: 50% profit rise[2]
Canadian Oil: 400% profit rise[3]
Equally suspiciously, no-one in the media, nor in government, has uttered a single word about the gaping inconsistencies, either to say "haaaang on" or to rationalise them. The conspiracy theories are too obvious and numerous to be mentioned here, and it's getting bloody difficult to discredit them merely for being conspiracy theories, which seems to be the fashionable thing to do these days.
What's next? I predict that, as a result of the problems of Northern Rock in the UK and the so-called sub-prime "crisis" in the US, both countries will soon introduce a raft of measures to allow financial institutions to make lots more mon... I mean, to recover so that they do not adversely affect people's savings. I don't know about the US, but in the UK it's already happening: the government is thinking of allowing banks to be bailed in secret[4][5]. Who needs transparency when it's far simpler to hide problems behind people's backs? And this is despite Mervyn King's excellent statement that:
The only thing that will stop banks taking risky activities is the knowledge that if things go wrong, they, and they alone bear the consequences.[6]
Needless to say, if I go missing within the next few weeks and this Blog is suddenly shut down, then you'll have a good idea as to why.
[1] Reuters. (31.01.08), “India’s IOC Q3 net profit rises 17 percent yr/yr”, http://uk.reuters.com/article/oilRpt/idUKBMA00028720080131
[2] Reuters. (31.01.08) “Shanghai Petro says 2007 net rose over 50 pct”, http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKSHA16615320080131
[3] Reuters. (30.01.08) “Canadian Oil Sands profit jumps on prices, output”, http://uk.reuters.com/article/oilRpt/idUKWNA784920080130
[4] Guardian. (31.01.08) “New Powers for Bank to Stage Secret Rescues”, http://www.guardian.co.uk/business/2008/jan/31/northernrock.bankofenglandgovernor?gusrc=rss&feed=business
[5] publicradio.org. (30.01.08) “Bank of England to save banks in secret”, http://marketplace.publicradio.org/display/web/2008/01/30/bank_of_england_bailouts/
[6] Reuters. (24.09.07) “Regulation stalled Northern Rock Rescue”, http://uk.reuters.com/article/personalFinanceNews/idUKNOA03409820070924?pageNumber=3&virtualBrandChannel=0
