Oil Price Spike, as Exxon and Others' Profit Skids, Shows Potential for New Economy-Killing...

Oil Price Spike, as Exxon and Others' Profit Skids, Shows Potential for New
Economy-Killing Energy Roller Coaster, Says Consumer Watchdog

Profit Reports Offer More Proof That Oil Prices are Disconnected From Actual
Petroleum

SANTA MONICA, Calif., July 30 /PRNewswire-USNewswire/ -- On the same day that
Exxon Mobil reported a second quarter profit of $3.95 billion dollars, down
66% from last year, the price of oil on speculative markets rose more than
$3.00 a barrel, Consumer Watchdog noted. Yet the same forces that cut Exxon's
profit -- copious supplies of oil and fuels on world markets --should still be
curbing the price of oil.

"The price of oil is still being driven by trading on speculative markets,"
said Judy Dugan, research director of Consumer Watchdog. "The same forces that
drove oil prices to $147 a barrel a year ago and gasoline prices to $4.00 and
above remain at work, even though the economy is showing only small signs of
recovery. Consumers are still in the grip of record joblessness and wage
stagnation."

The nonprofit, nonpartisan Consumer Watchdog praised the Obama
administration's recent hearings in the Commodity Futures Trading Commission
on the need for broad oversight of energy and commodity trading. The new head
of the commodities regulator, Gary Gensler, has signaled support of regulation
that would put reasonable limits on the energy and commodity trades by large
funds that are simply gambling on price without either selling or buying
actual oil.

BP, Shell and Conoco Phillips showed similar profit drops this week for the
second quarter, all of them citing steep reductions in oil consumption and a
squeeze on refining profits as both gasoline and diesel consumption fell in
tandem with the economy.

"The more than $3.00 a barrel jump in oil prices today followed the stock
market, not the oil business", said Dugan. "Yet energy traders operate under
much looser rules than stock traders, because commodity markets were developed
to let producers hedge their losses -- not to provide a gambling opportunity
for traders."

Consumer Watchdog has called for limits in energy markets including aggregate
curbs on the size of trades by speculators, including subsidiaries; regulation
of electronic markets that are currently exempted; and far greater
transparency and public reporting of trading activity.

"The time to act is now, before a new price spike in energy markets can stomp
the fragile start of economic recovery," said Dugan.

Consumer Watchdog has also backed proposals to eliminate taxpayer subsidies
for major oil companies, including a White House proposal to tax oil produced
in the Gulf of Mexico to compensate for oil royalty relief mistakenly granted
in federal contracts in the late 1990s. Today's temporarily lower profits are
no reason to continue those and other subsidies, said Consumer Watchdog.

www.consumerwatchdog.org

www.oilwatchdog.org

SOURCE Consumer Watchdog

Judy Dugan of Consumer Watchdog , +1-213-280-0175 (cell), or +1-310-392-0522
ext. 305