Despite growing its net income 17% for the quarter, Exxon Mobile ($89.34, down $3.73) is down about 4% this morning. The company reported earnings for the quarter of $10.9 billion, or $2.03 a share, up from $9.3 billion, or $1.62 a share, from Q107. Revenue came in at $116.8 billion compared to $87.2 billion a year earlier. Both numbers missed Wall Street’s figures for a profit of $2.13 per share on revenue of $124 billion.

You would think with oil at record levels Exxon would have easily topped estimates. Not so. The problem was that the margins at Exxon’s refining operations such as gas weighed heavily on the bottom line. To put it in perspective oil prices averaged a $100 a barrel in the first quarter. A year ago it was at $58 a barrel.

“Analysts” have attributed the spike to growing global demand and “speculative trading”. Oh, and throw in a weak dollar too. So let me get this straight. Oil is at $120/ barrel and gas is hitting $3.60/ gallon on average. So not only are we using more oil, it’s costing us even more to drill for it. Something’s got to give.

Other oil stocks are mixed. BP PLC (BP, $72.57, down $0.22), Chevron (CVX, $94.44, down $1.71), and ConocoPhillips (COP, $85.90, down $0.25) are lower while Royal Dutch Shell ($80.01, up $0.31) is trading higher.

Rick Rouse