Analysis #2: Chevron Profit Slips 26% as Costs Increase

Chevron, a major oil company was the last of the big oil corps. to post their thrid quarter earnings. they reported that there was a repeating of rising crude prices that are biting into profits as refining margins fall. The major corporation is the second largest oil company by stock market value reported that their profit fell 26% in the quarter as it was unable to recover its high costs at the pumps. This fall in profit has caused the Chevron gasoline prices to increase to live up to the amountof money that they have lostvfor this third quarter. This fall in profit is because of weak refining and marketing conditions in the United States. This has been the case for many oil companies resulting in higher oil prices since August after a long summer of oil prices that didn't live up to the high expectations that were predicted in the spring. As the demand for pretroleum and crude oil increased, the prices increased but a lage in the production of the oils caused the supply to decrease. In the case of Chevron's profit falling causing the costs to increase affects both supply and demand as suply decreases and demand increases. It is due to the low amounts of production of oil causing the prices to increase and no sales. Profits from Chevron's oil and gas exploration and production slipped on lower output a sa result of renegotiations with other countries. Chevron is saying that they will do whatever it takes top lower costs and to get there profits to increase, but if they continue to have the lag in production with high demand then there will be no change.