Quote Originally Posted by God
ok this stuff is annoying.

the profit margins were nearly the same.
there is a difference between PROFIT
and PROFIT MARGIN

for example.

say your company makes 1 million dollars a year.
now you subtract your operating costs which are 930,000
you made 70 000$ profit

now
to find the profit margin
divide the 70 000 by 1 000 000
you get
0.07
=
7%

now say the next year, you make 2 000 000
and you have double the operating costs of last year,
930 000 x 2 = 1 860 000
so subtract that from the revenues, you get
140 000

DOUBLE THE PROFITS! right? yes, but.
what is the profit margin you ask?

divide 140 000 by the revenues, 2 000 000

its still 0.07

while you can hype up everyone by saying profits were XXXXXXX
or in this case PROFITS DOUBLED!

they are the same percentage of last year.

So whats todays lesson?

Don't beleive the media hype.
Actually after all that, which makes sense, you are way off.

There was no increase in oil but rather a decrease in production capabilities and flow obstructions. So the cost to produce xxx number of barrels into usuable products never changed as they either produced less or the same amount. The rationing of items and the price of gas going up is where there record profits came from. Example, it costs you $30 to make product A. You produce 50 a quater and they sell for $60. Demand soars driving the price to $200 but you still only produce 50 a quater at a cost of $30 each. Therefore you have a record profit for x quarter. This is basically what happend in the oil market.