On Exxon
Last night Exxon Mobile (XOM: chart) released their second quarter earnings and it’s to no ones surprise that they did rather well. Or did they?

Exxon reported that through the second quarter their profits rose by 36%, leaving them with a net income of $10.36 Billion. 

To a guy like me, that’s a pretty big number.

An even bigger number:  $88.67 Billion, which is their net expenses during that same period.

So by my calculation, this leaves Exxon’s profit margin right at 10%.

If you own a McDonalds franchise, you’d squawk at a 10% profit margin, as you’re typically shooting for 15%.

So from a business standpoint, is Exxon mobile really making a killing in the oil and gas industry? I wouldn’t call it a killing in terms of profit margin, just look at their expenses.  However based on the scale of the numbers they play with in their ledger, they’ve become a public whipping boy, as EmptySpaces puts it, for everyone who steps up to the pump.

Natural Gas Supply Report
From the natural gas side of the market, storage was down last week by 7 Bcf, but storage is still higher than it was last year by 379 Bcf.  This net drawdown is due to an increase in electrical generation as influenced by the increase in temperatures across the nation.

Naturally natural gas stocks like Chesapeake Energy (CHK: chart) and Southwestern Energy (SWN: chart) are reacting well to the news, however it remains to be seen whether this drawdown trend will continue.  Temperatures are moderating, however another heat wave may be in the works.

Year over year we’re still sitting on significant reserves sufficient to absorb an increase in demand for at least a few weeks.

Are natural gas stocks worth looking at again from a long term perspective?  Maybe, but I’d still give them a few weeks to see if the supply trend continues.

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