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Less production, higher prices

Less production, higher prices - but the oil price...

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Akash Dalsania Reaves 18 November 2 Less production, higher prices ConocoPhillips and Hess’s stocks have both been increasing in value during the fiscal year. The rising oil prices have helped both of these corporations make profits since gasoline is such an inelastic product. Hess and ConocoPhillips have even starting producing less but yet they have still been making higher profits. ConocoPhillips’s net income for the third quarter went from 1.5 billion to 3.1 billion dollars and total revenue increased by 20% or 49.6 billion dollars. The 11.7% increase in gasoline price actually, believe it or not, helped the company. Likewise Hess’s total revenue went from 7.4 billion to 9 billion dollars. For Hess though, unlike ConocoPhillips, had increasing costs
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Unformatted text preview: but the oil price increases were so high that they not only covered for the costs but increased profits by a great margin. Another cause for the increase of the two companies resides in the power of the firms that sell oil. Since there are so few major sellers of crude oil other countries have to act as price takers and accept the prices. Fontevecchia, Agustino. “Less Production, Higher Prices A Winning Equation For Conoco and Hess-Forbes.com. “ Forbes.com-Business News, Financial News, Stock Market Analysis, Technology & Global Headline News. 17 Oct. 2010. Web.17 Nov.2010. <http://www.forbes.com/2010/10/27/earnings-conoco-hess-equities-markets-oil.html.>...
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