Reply #8: Why in the hell would they NEED one? [View All]

Oil at $40 a barrel is still profitable, just not AS profitable. The marginal investment in production for a barrel of crude oil is in the range of $5-20, depending on where it's pumped. Everything above that is profit (or recouping development costs). You also apparently have a minimal understanding of the mechanism by which oil prices are determined; it's a commodity, traded globally on an open market; supply and demand are the greatest single factor determining price. Demand has slumped dramatically with the present economic crisis, therefore the price of oil has slumped dramatically.

Also, oil companies have tremendous cash reserves thanks to their recent record profits (something that banks, that saw billions in book value wiped out thanks to fractional reserves and bad loans, and auto companies like GM that haven't been profitable for a while, DON'T have).