Exxon CEO: Oil Should Be $60-70 a Barrel

Posted by Mike Tirone - Thursday, May 12th, 2011

The head of Exxon Mobil, Rex Tillerson, took his time at the microphone today during the Senate Finance Committee hearing on “Oil and Gas Tax Incentives and Rising Energy Prices” to point the finger at the speculators for the run-up in oil prices.

He spoke to Congress with aggression, saying that based only on the fundamentals of supply and demand – truly giving our Congressional members an economics lesson – that the price of oil should be in the $60 to $70 range, instead of teetering around the current $100 a barrel price.

In response to a question about the influence of speculators on high oil prices, Tillerson said to the committee, “When we look at it, it's going to be somewhere in the $60 to $70 range, if you said: 'If I had access to the next marketable barrel, what would it cost?”

Even as gas prices drop significantly as they have of recent, people are still quite frustrated when having to pay $4-plus a gallon at the pumps, and without miraculous changes, we'll never see barrel at the price that Tillerson is discussing.

The price of oil back in 2005 during the previous Congressional meetings with the top oil executives was at just $55 a barrel. Senator Ron Wyden of Oregon played a video of those hearings today, highlighting that all of the executives agreed that they did not need generous tax breaks because of oil selling at the – then current – rate of $55 a barrel.

"You all said you didn't need them in 2005," Wyden said. "You seem to be telling a different story today."

Chevron Corp. chairman and CEO John Watson made clear that the oil companies don't want “special” tax benefits – rather they just want the benefits that other industries get.

The Oregon Senator and his fellow Democratic members were in agreement that these massively profitable corporations are doing well from themselves and they do not need anymore “breaks.”

Thursday's marquee hearing in Washington featured the CEOs of Shell Oil Co., ExxonMobil, ConocoPhillips, BP America and Chevron Corp., five companies that booked profits totaling $36 billion during the first quarter. The Democrats say that with profits that high, the big oil companies wouldn't miss tax breaks that average $2 billion a year.

  +4

More like this...

What's Up with Rising Crude Oil Prices?
Oil's up, but so is Economic Optimism: Second Day of Rising Crude Oil Prices.

Exxon Mobil: Profits are up, up, up!
Exxon's profit this quarter approaches $11 billion- up 69%! Per-share profits prove to be at least 10% higher than many analysts' estimated.

U.S. Economic Expansion Picks Up Steam as Railcar Volume Rises
Railcar volume rose significantly during the first quarter, with 4.6 million freight cars on the tracks. But does it mean that the economy is righting itself?


Silver Pandas