Oil firm ConocoPhillips (NYSE: COP) reported second-quarter earnings of 87 cents per share this morning, barely edging the consensus estimate calling for 85 cents per share. Despite topping the consensus estimate, the results fell well short of last year's same-quarter earnings of $3.50 per share.

Quarterly revenue totaled $35.4 billion, which was less than half of the $71.4 billion earned a year ago. CEO and chairman Jim Mulva noted in the company's press release, "we delivered solid operational results during the quarter," despite lower commodity prices and margins in the second quarter.

U.S. gasoline consumption has declined for more than two months on a year-over-year basis, U.S. Energy Information Administration data indicates,

From a consumer standpoint, that's not only a good thing, it may be the only thing keeping already sky-high, $4 per gallon gasoline prices from moving even higher, says energy trader Jim Dietz.

"Lower demand is preventing gasoline sellers from raising prices even more. That's bad news for them, but it is helping consumers a little by keeping prices lower than what they would be, given the jump in oil prices," Dietz said.

Oil, which traded at $142.80 per barrel, up $1.83 on Wednesday at mid-day, is up about 100% in the past year. Meanwhile, the average price for a gallon of unleaded gasoline in the U.S. is about $4.09 per gallon, up about 45% during the same period, according to the EIA.

"Historically, a gallon of gasoline cost two times to three times as much as a gallon of crude oil. Now that price ratio is about 1.3-to-1," Dietz said. "If the old ratio applied, gasoline would easily be 40-60 cents higher, probably more." Dietz added that he is presently flat, or has no energy trading positions open ahead of the 4th of July weekend.

World leaders, hedge fund managers, and oil ministers are all in the Saudi kingdom trying to dope out why crude prices are so high. Early news out of the meeting is not good.

The head of Shell told Reuters that the meeting was a waste of time, saying "What I've heard so far are basically all good ideas, but it will probably not change the price tomorrow morning."

The Saudis did day that they would increase oil production.

The summit is a fine example of how too many cooks spoil the soup. Investors have a different agenda from the oil companies. The oil companies have a different agency from the exporters.

The importers just want lower prices.

Douglas A. McIntyre is an editor at 247wallst.com.

Exxon Mobil Corp. (NYSE: XOM), whose huge profits have made it one of the most vilified companies in America, was brought down to earth today after posting disappointing earnings.

Net income at the world's largest oil company rose 17% to $10.9 billion, or $2.03 per share, from $9.3 billion, or $1.62 per share, a year earlier. Revenue rose 34% to $116.9 billion. Analysts had expected profit of $2.13 on revenue of $124.4 billion, according to Thomson Financial. Shares of the company fell.

Just because oil prices remain above $100 per barrel doesn't necessarily mean everything is going Exxon's way. For one thing, high oil prices resulted in "significantly lower" refining margins, which pushed down downstream earnings by $746 million to $1.16 billion. Lower margins also pushed down profit in Exxon's chemical business by $208 million to $1.03 billion. Moreover, spending on capital and exploration projects soared 30% to $5.5 billion "as we continued to actively invest in projects to bring additional crude oil, natural gas and finished products to market."

The problem is that's proving to be difficult. For one thing, production at the company's oil wells dropped as did natural gas production in the Middle East, The U.S., Canada, South America and Asia. This is happening as surging demand from the developing world is keeping oil prices at record levels. Exxon is "having trouble raising production, and that's not a good sign,'' Leeb Capital Management's Stephen Leeb told Bloomberg News.

With the recent surge in oil prices, it should come as no surprise that we are getting hit hard at the gas pumps, and according to AAA, prices moved to a new record high last night of $3.303 for a gallon of regular unleaded.

This is the second day in a row that gas prices have set new highs, after jumping more than a penny overnight. At these current levels, prices are now a massive 22% higher than they were this time last year.

Congress has been trying to get to the bottom of the situation, and earlier this week they heard testimony from executives of 5 of the world's largest oil companies regarding the current price explosion. Some analysts are predicting that Congress may have to step in to take some action to help combat the record-high prices by making the purchase of high-risk oil contracts tougher to do, which could lead to lower prices. Whether or not that takes place remains to be seen.

Readers of this space know that oil/oil services has been a preferred sector. Given ramping demand in the developing world and oil's importance in a growing global economy, oil and oil services companies are likely to continue to experience steady demand for their services/products, and a provider worth a review is Marathon Oil.

Marathon Oil Corporation (NYSE: MRO) has what analysts like to see in an oil operation: a large/geographically-wide exploration footprint, very good production, and strong refining operations.

Further, that last tangible may be the most valuable, given the barely-adequate refinery capacity in the United States. What's more, the stock market's early 2008 sell-off has created a buying opportunity with Marathon. With a p/e of about 9, MRO's risk/return ratio is low. The Reuters FY 2008/FY 2009 EPS consensus estimates for MRO are $6.33 to $6.77.

The markets have two additional oil industry data points to digest Friday, and through the weekend:

First the good news: OPEC (Organization of Petroleum Exporting Countries) has increased oil production in response to sustained +$90 per barrel prices.

OPEC's 10 members bound by output targets, all except Iraq and Angola, pumped 26.98 million barrels per day, up 180,000 barrels per day from September 2007, according to the survey of oil firms, traders, OPEC officials and analysts, Reuters reported Friday.

Has oil's high price given you the shakes? Well relax, and leverage oil's high price by considering Marathon Oil's (NYSE: MRO) shares.

Marathon has the 'oil triple play,' of sorts, what one likes to see in an oil operation: a large, geographically-wide exploration footprint, very good production, and strong refining operations.

Further, that last tangible may be the most valuable, given the barely-adequate refinery capacity in the United States. What's more, Thursday's market sell-off that saw the Dow close down about 362 points to 13,567.87, has created a buying opportunity with Marathon. MRO's shares closed down $1.46 to $57.63. And with a p/e of 9, MRO's risk/return ratio is low.

MRO's drawbacks: Analysts are keeping an eye on costs, and healthy gasoline refining margins may narrow heading into early 2008. But unless there is a substantial increase in global oil production, or a comparable reduction in U.S. gasoline consumption, Marathon is well-positioned for the immediate years ahead. The Reuters F2007/F2008 EPS consensus estimates for MRO are $6.04/$6.44.

The First Call mean rating for MRO is: Buy. [20 firms.] Mean 2007 target: $63.75. [high: $75, low: $46.50.]

Stock Analysis: Marathon is moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 1 year should be rewarded from MRO's shares. Sell/Stop Loss: $39.

Oil at $120 per barrel?

Once unfathomable, it's now possible, and in the near future -- as in the summer 2008 -- if current trends continue.

Economist H. David Wang told BloggingStocks that a convergence of "bullish events" could take oil "well over the century mark next year." Oil traded early Thursday around $95.50 per barrel.

"We know about emerging market demand, and the various political issues which pose a threat to supply, but now there's concern that OPEC won't strive to increase production because of the falling dollar, because most oil transactions are priced in dollars," Wang said. "That's a concern. That's exactly what the market does not need at this time. Up to now the market has factored-in OPEC cooperation. But now we hear OPEC talking about a lack of a need to raise production. If OPEC doesn't raise production, we're looking at $110 or even $120 per barrel oil by the summer of 2008."

In the past, when I have written about oil prices, at least once a week I get a comment that we should start to put heavier taxes on oil companies... well, those of you that are of that belief will be delighted to hear that over the weekend Congress decided to do just that!

On Saturday the House of Representatives approved an additional $16 billion in taxes to be imposed on big oil, while at the same time giving billions of dollars in breaks to companies engaged in renewable energy and conservation efforts. The House hopes that passing this legislation will show that it is "turning to the future", but not everyone is pleased to see this pass.

Many Republicans (not surprisingly) were opposed to the passing of these new taxes. They claim that the advocates for the new taxes are not taking into consideration America's need to increase its output of domestic oil, natural gas and coal.

In an attempt to get more interest in the use of renewable energy, the House also passed a bill that will require any investor-owned electric utilities company to generate 15 percent of its electricity from renewable energy. Not all electric companies were in favor of this action, stating that it would result in increased prices for consumers that live in areas that do not have abundant wind energy (which is currently the preferred method for renewable energy). Opponents to this argue insist that this will not be the case, and instead we will see an increase in investments in these renewable energy supplies.

ExxonMobil has long been frowned upon for its stance on global warming, but recently the company has been trying to put forward a more environmentally friendly image. The most recent step to cleaning up its act comes as the oil giant has joined talks sponsored by Resources for the Future, a nonprofit organization from Washington, D.C. aimed at coming up with ideas on how to better regulate greenhouse emissions.

For the last 7 years American companies have not had to pay too much attention to the impact of their activities on the environment under the current Bush Administration, which has refused the idea of mandatory reduction in emissions. In fact, Bush went so far as to to back out of the Kyoto pact soon after being elected. The Kyoto pact puts restrictions on greenhouse gases.

This all may change now the Democrats have taken over control of the Congress and have expressed that climate control is on their list of priorities.

ExxonMobil is one of the last big companies to deny that global warming is taking place and many environmentalists are hoping that if ExxonMobil can begin to help address global warming that many more will follow in it's footsteps. Last year ExxonMobil decided to stop the private funding of the Competitive Enterprise Institute which has long advocated limited federal regulation of industries.

While ExxonMobil has not formally come out and announced a new opinion on global warming, things are definitely looking better for the world's largest traded company.

ExxonMobil (NYSE: XOM) has become the king of the hill on this year's Fortune Global 500 list. With the run up oil has had over the last couple of years (at least up until the last 3 weeks) it should come as no surprise that this years top 10 consists of 5 oil companies. Last year's top company, Wal-Mart Stores, Inc. (NYSE: WMT) didn't fall very far, and managed to follow XOM in the second place position.

How did ExxonMobil manage to get to the top? Easy... the company posted $339.9 billion in revenues with $36.1 billion in profits. Wal-Mart came in with $315.6 billion in revenues with $11.2 billion profits. A good deal of last year's explosion in oil prices came as a result of damage from hurricane Katrina which crippled much of the Gulf's oil supplies. So far this year we have not been hit with any major hurricanes which has led in a big part to the recent sell off seen in oil.

Other oil stocks in the top ten this year: