Rex: Fair Value for Oil is $60

According to Rex Tillerson, CEO of Exxon Mobil, oil should really only be worth 60-70 bucks a barrel right now – Market Beat’s Mark Gongloff notes that this would mean its current price is somewhere around 40% overvalued.

The name of Tillerson’s game is ending the oil company subsidy debate as soon as possible.  He’s at the Senate Finance Committee hearing on the subject as we speak.  Tillerson’s gambit is to put “speculation” on trial rather than allow the conversation to focus on “greedy oil execs”.

In truth, big producers like Exxon are not necessarily in favor of skyrocketing oil prices.  They are typically hedged anyway thus that upside capture simply isn’t there.  They are then faced with climbing acquisition and exploration costs as everybody on the equipment and services side raises prices.

The integrateds have done very well for themselves thus far in 2011 – first quarter profits for the big five majors totaled around $34 billion.  The last thing they want is too much of a spotlight on this, and nothing focuses that spotlight like $100 oil prices or 4 bucks a gallon at the pump.

Here’s a look at the way big oil executives view the price of crude and what it means for them:



What's been said:

Discussions found on the web
  1. commented on Sep 14

    … [Trackback]

    […] There you will find 71723 more Information to that Topic: […]

  2. w88 commented on Sep 21

    … [Trackback]

    […] Information to that Topic: […]

  3. bitcoin trading software commented on Sep 22

    … [Trackback]

    […] Find More to that Topic: […]

  4. immediate edge scam commented on Sep 22

    … [Trackback]

    […] Read More Information here to that Topic: […]

  5. dragons den uk bitcoin commented on Sep 29

    … [Trackback]

    […] There you can find 9729 additional Information on that Topic: […]

  6. bitcoin era commented on Sep 30

    … [Trackback]

    […] Read More on that Topic: […]

  7. Foosball Game for Sale Online commented on Oct 13

    … [Trackback]

    […] There you will find 23011 more Information to that Topic: […]