Energy

Conoco (COP) Exits Gas Station Business: A Lost Opportunity

Tx00338coilwellgusherodessatexasposConoco (COP) is selling its gas stations, following Exxon (XOM) out the exit door. Perhaps there is a greater fool; a company that thinks it can make money on a business that Conoco believes is dying.

According to The Wall Street Journal, “ConocoPhillips is expected to sell the remainder of its 600 company-owned gasoline stations to closely held PetroSun West LLC for $800 million.”

Refining and selling gas and diesel has become the ugly end of the oil business. Crude comes off the ships and through the pipes at $120 a barrel. The refined products are so expensive that consumers and businesses cannot afford them. Gas at $4 may seem high, but it is not profitable for Big Oil.

The answer to the problem is to pawn off the gas station business to the buffoons who think they can still make money.

Conoco is probably making falling prey to an error in judgment. If oil continues to come down and gas prices deflate, the profitability of the old line service station will probably return to what it was three or four years ago. The business runs in a cycle, but in the best years it throws off mighty profits.

Conoco may reason that owning stations is simply too tiny a business to be worthwhile. Under the sales agreement its brand name will still be on the front door, it will lose control over the level of service at those retail outlets. That, in essence, is what drives its reputation with customers. Giving it up for a modest amount of money is a mistake.

Douglas A. McIntyre

The Average American Has No Idea How Much Money You Can Make Today (Sponsor)

The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.

But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

 

Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.

1 https://www.fdic.gov/national-rates-and-rate-caps

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.

AI Portfolio

Discover Our Top AI Stocks

Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.

You can follow him investing $500,000 of his own money on our top AI stocks for free.