Oil Companies See Drops in Profits

Oil companies are reporting low earnings for the third quarter. The recession has left its mark on the demand for oil as people work to cut down on oil consumption. This lack of demand makes the price of energy such as oil lower and puts pressure on the oil companies. An article from the Washington Post reads:

The world's biggest oil companies are reporting sharp declines in quarterly profit as the recession continues to weigh on consumer demand, driving down energy prices.

Exxon Mobile, the world's largest oil company by market value, said Thursday that its third-quarter profit slumped 68 percent, to $4.73 billion (98 cents per share). That's down from $14.8 billion ($2.85), in the same July-September period a year ago, the most lucrative quarter ever for the oil industry, when crude oil prices neared $150 a barrel.

Royal Dutch Shell, meanwhile, said Thursday that its third-quarter profit fell 62 percent, to $3.25 billion, while sales tumbled 43 percent. Shell, Europe's biggest oil company, said it would cut 5,000 jobs and that 15,000 employees must reapply for employment.

The future of the oil companies is looking a little shaky and uncertain right now because of the lack of demand for oil right now as a result of the current economic conditions.