Gas prices to hit record highs as oil companies post record profits

2022-05-14 00:04:37 By : Ms. Eva Wang

The price at the pump is starting to inch its way up as the snow gives way to warm weather and more people travel to their favorite vacation spots.

In Somerset County, the price of unleaded reached above $4.50 per gallon over the weekend and dipped just below on Monday. Most gas stations across America's County hit $4.45, while some reached $4.49 as of Monday. Even most of the cheapest spots were still 30 cents above $4.

Oil companies profit: Oil giants reap record profits as war rages in Ukraine, energy prices soar: Here's how much they made

According to GasBuddy, many states had unleaded price averages above $5 per gallon, with California and Hawaii having the highest above $5.24.

The national average dipped for a few weeks after March and is now swinging back near $4.35 this week. Prices are expectedto increase as more people travel this spring.

Pennsylvania's average is just above that at $4.51.

New restaurant:Little Caesars is opening a first-of-its-kind store in Somerset. How will it be different?

Although it doesn't see headlines as often, diesel fuels much of the economy and can have an important impact on the price of other goods.

At the end of April, the price of diesel hit an all-time high of $5.16 per gallon. The previous record was $5.15 as of March 10.

Patrick De Haan, head of petroleum analysis at GasBuddy, said that diesel and jet fuel inventories are falling, which could increase those prices soon.

“Should distillate inventories fall another five million barrels, which is less than five percent, they will be at their lowest level in nearly 20 years, compounding the problem," he said in a press release.

Back in March:When will the cost go down? Somerset area residents show concern about gas price spike.

"There’s no quick solution as the economy has seen a robust turn around, made worse by Russia’s war on Ukraine as the West fences off Russia’s oil.”

GasBuddy also attributed high diesel prices in the northeast to COVID-19-induced refinery shutdowns and a 2019 fire at a Philadelphia Energy Solutions refinery.

"Combined, these issues have caused the loss of nearly half a million barrels in refining capacity," the gas price website says.

"Diesel prices are likely to remain at a substantial premium to gasoline as imbalances persist, however, refiners are likely adjusting yields to produce as much diesel and jet fuel. Economics favor production of these refined products and refiners chase the higher market value of these fuels."

Meanwhile, Exxon Mobil, Shell and others recorded record profits in the first quarter.

The benchmark for global oil prices, Brent crude, averaged at $102.23 a barrel during the first quarter — 67% higher than during the same period last year, according to the Associated Press.

The net profit margin of S&P 500 companies, which include energy giants such as Chevron and Exxon Mobil, in the first quarter has been running at 12.3% based on estimates and earnings reported so far, according to FactSet. That’s down from a peak of 13.1% in the second quarter of last year, but above the pre-COVID-19 level of about 11%.

“Profit margins should be coming down,” Lindsay Owens, executive director of Groundwork Collaborative, a progressive economic policy research group, previously told USA TODAY. Instead, she noted, “they’re actually growing.”

Shell's adjusted earnings rose to $9.1 billion from $3.2 billion during the same period last year.

BP profits rose to $6.2 billion, which is more than double last year's first quarter profits of $2.6 billion.

At the end of April, Exxon Mobil reported $5.48 billion in profits during the first quarter of 2022 — also more than doubling its profits compared with the same period last year. Revenue for the Irving, Texas-based company was $90.5 billion, far exceeding the revenue of $59.15 billion during the same quarter in 2021.

Also at the end of April, Chevron reported a quarterly profit of $6.26 billion, over four times its earnings of $1.4 billion in the first quarter of last year. Revenue for the San Ramon, California-based energy producer surged 41%, to $54.37 billion.

According to Reuters, China Petroleum & Chemical Corp, or Sinopec, reported 22.61 billion yuan ($3.45 billion) net profit under Chinese accounting standards for the first quarter of 2022, compared to 17.93 billion yuan ($2.69 billion) last year.

For the first quarter of the year, Phillips 66 reported first-quarter earnings of $582 million, with adjusted earnings of $595 million. In 2021, Phillips 66 reported a first-quarter loss of $654 million, with an adjusted loss of $509 million.