Second quarter earnings for ExxonMobil (NYSE: XOM) and Royal Dutch Shell (LON: RDSA) were reported on Thursday.
Both companies reported a significant increase in earnings, according to the Associated Press.
Exxon earnings rose 41%, from revenue of $7.56 billion to $10.7 billion. Royal Dutch Shell saw their earnings more than double, with an increase from $4.4 billion to $8.7 billion.
Though earnings did increase, they fell short of Wall Street’s projected increase, mainly because of a lack of supply that caused prices to increase.
The boost in revenue was due largely in part to the high prices of oil and gasoline for the second quarter. In that time, prices increased up to 30%, according to the New York Times.
BP even saw a revenue boost despite its dealings in the Gulf oil spill.
The surge in earnings has called attention to oil companies as the nation struggles to come to an agreement on raising the debt ceiling.
Some believe this would be an ideal place to implement spending and subsidy cuts – if the companies are making so much money, why do they need government aid?
According to the Associated Press, President Obama expressed desire to implement $4 billion in cuts of oil subsidies in April.
But the oil companies claim to need these for development within the nation – if they can’t continue to do so, the economy won’t be helped much by those cuts.
Oil companies are also expanding projects overseas to bring in more oil, which has been lacking due to tensions in the Middle East.
Shell, for example, is running its Qatargas 4 liquefied natural gas project in Qatar, according to the New York Times.
And both companies are expanding their natural gas exploration projects within the U.S.
Demand was hurt in the second quarter by the high prices, though this shortage of demand could help to bring prices down in the future.
Royal Dutch Shell was down 0.62% on Thursday, while Exxon dropped 2.22%.
That’s all for now,