Bad timing that Exxon quarterly profit announcement. Just 11 days before the elections. Exxon PR left a reporter from ABC standing outside their Houston headquarters to call in for a phone interview. There response to the massive profits was a mix of embarrassment and confusion. And the media plays along. Why are gas prices going down these past few weeks?

Now we know. Because Exxon... Which sets the prices of the products it sells, knew this was coming.
Let's face it - 10.5 Billion doesn't happen over night. Exxon knew that they were raking in profits. They know what oil costs them, and they know what they charge for it. Sure, that could change - prices could rise, but then they could raise prices. The media is culpable here as well, as they report prices at the pump as if there are somehow magically the result of some marketplace mechanism that doesn't have a human face. It's simply not true.

The thing that is the most startling about this profit number is that the oil companies must have done every accounting trick in the book to try and bring this number down. Postpone income, accelerate expenses, bill every possible cost to the bottom line. So this is the number after they've done every trick in the book.

Its hard not to think about both Bush and Cheney's roots in Big Oil, and the fact that this administration has done nothing to pressure oil companies to reduce prices. And the Democrats haven't said much either. Even the media, which did ton's of Man On The Street stories of outrage when the last quarterly profits were announced seemed to see this as old news. They reported profits with headlines like this one from AP: For Exxon Mobil, Another Gusher
$10.5 Billion Profit For Quarter Second-Largest Ever For A Public Company"

The thing is - unlike other companies, oil profits are actually pretty simple. Oil R&D is all long term investment, planned and budgeted out for many years. Repairs (like that of the Alaskan Oil Pipeline) should likewise be easily projectable. And unlike other products - demand is pretty much fixed and assured. For example, at McDonalds - if you raised Burger prices from $1.25 to $1.50 you'd lose some sales. So increased prices would also impact sales. Not so for gas. Why? Because people still need to get to work, or fly, or have Fed Ex deliver a package. So people just pay the price. Sure - vacation travel may be impacted a bit - but its still cheeper to drive than fly.

If you ran a company that provided an essential service, and increasing prices had no impact on sales or demand - why not raise prices and provide the profits to your stockholders?