Exxon Mobil Surpassed

Exxon Mobil(XOM)is no longer the largest company in the world.That distinction now belongs to Petro China(PTR).Petro China is worth an estimated one trillion dollars.In an initial public offering on the Shanghai exchange yesterday,the oil giant's shares tripled in value.Last week,Exxon Mobil reported earnings down 10%.The price of crude oil is at record levels,which means refiners such as XOM aren't able to make as much money off their refining operations,since the competitive nature of gasoline sales prevents them from raising gas prices very much.This is known as a "narrow crack spread." As well,production was down 2%,with new oil fields to replace declining ones being very hard to locate;what is more,the countries where XOM is exploring and drilling are demanding a bigger cut,and exploration and drilling costs are rising.Big oil is feeling a big squeeze.Chevron(CVX)reported nearly identical results for the third quarter.Investors will have to adjust to these smaller profits,but they are still in the many billions of dollars.According to Jerry Castellini of Castleark Management,the energy market is still in the early phase of an ascent.In order to fund enough of an investment to keep the oil flowing,a price of 100-200 dollars a barrel is needed.So far,the capital flow hasn't reached the level of a secular bull market.Oil price rose 17% in October-the biggest increase since Hurricane Ivan struck in 2004.Shares of both XOM and CVX rose on Monday,even as crude oil retreated 2.03%.This morning,shares of XOM were up in European trading,as was the price of crude.Many analysts are recommending energy stocks as a good long-term holding.