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Oil companies' massive profits spark US outrage

The oil industry's massive first-quarter profits this week triggered another round of election-year outrage from US Congress members, who spoke up on behalf of angry constituents feeling pinched at the pump.

There is little that either lawmakers or the industry can do in the short term about the high oil prices that yielded those profits, however, as long as energy markets stay tense and the global economy is expanding. Instead, it would take a decision by consumers and businesses to consume less fuel, a choice they have yet to make, analysts said.

The US' three largest petroleum companies -- Exxon Mobil Corp, Chevron Corp and ConocoPhillips -- posted combined first-quarter income of almost US$16 billion, an increase of 17 percent from the year before.

Crude-oil futures are trading near US$72 a barrel. US gasoline prices are above US$3 a gallon (US$0.7925 per liter) in many places, and have even climbed above US$4 in southern California. Yet demand continues to rise.

The trends have convinced Wall Street this year's earnings of the nation's three largest oil companies will surpass last year's combined record of nearly US$64 billion.

US President George W. Bush said on Friday that taxing enormous oil industry profits is not the way to calm Americans' anxieties about pain at the gas pump, and that his "inclination and instincts" are that major oil companies are not intentionally overcharging drivers.

Bush's remarks suggested the former Texas oilman is unlikely to take harsh action against oil companies despite public anger about the rising cost of fuel.

With politicians concerned the issue could tilt what are expected to be close midterm elections this fall, the US president and many in Congress have been rushing to offer solutions, most of which would offer little immediate relief.

Some Democrats have viewed this week's announcement by major oil companies of huge first-quarter profits as a chance to renew their push for a windfall profits tax.

But though a few Republicans, including Senator Arlen Specter of Pennsylvania, have said the idea ought to be examined, Bush and most Republican lawmakers strongly oppose it.

"The temptation in Washington is to tax everything," the president said in a wide-ranging news conference.

Instead, Bush called on Congress to ease regulations that make it difficult to expand the nation's refining capacity. He also urged oil companies to plow their profits into finding and producing more energy, such as by building natural gas pipelines or pursuing renewable energy sources -- all ventures that could further boost the companies' bottom lines.

Three days ago, Bush announced a series of steps, including calling on his administration to investigate possible price gouging. But he admitted on Friday that he thinks it's probably not happening.

"I have no evidence that there's any rip-off taking place," Bush said. "It's the role of the Federal Trade Commission to assure me that my inclination and instincts is right."
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