Exxon Mobil Corp.'s second quarter earnings climbed 35 percent from the second quarter of 2004 (after excluding special items) to $7.64 billion. BP PLC, the world's second-largest publicly traded oil company, said its net income increased 29 percent, to $5.59 billion. At Royal Dutch Shell PLC, second-quarter profits rose 34 percent to $5.24 billion. ConocoPhillips, the third-largest U.S. oil company, reported an eye-popping 51 percent jump in earnings, to $3.14 billion.
What's behind those numbers? When oil prices rise, petroleum companies that have long-term contracts or own oil reserves get a huge windfall. After all, they may have invested and developed those oil fields when prices were anywhere from $10 to $25 a barrel. Suddenly prices spurt upward and the companies are awash in profits.
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