Why Are Oil Stocks Up 5% This Week?

As prices for gasoline reach record highs all around the country because, we are told, of the devastation to our oil infrastructure and refining capacity, the stock market is exposing the oil industries' despicable secret: the winds of Katrina will be a windfall for big oil.

The Yahoo Major Oil & Gas Index shows stocks up 5% since Monday. ExxonMobil is up 5%. Halliburton is up about 8%. Why would companies sustaining massive damage to their property be doing so well? Why would investors bet that this is good for the oil industry?

What the market tells us is that the industry will not show restraint, but will, instead, cash in on the disruption and destruction. Of course, catastrophe profiteering is vile. Sure, the companies, whose record profits of one quarter are exceeded by the next quarter's, should be voluntarily cutting margins and freezing prices in this time of national need. But they aren't and they won't. So the stocks rise and the coffers swell.

And people should be angry. A rough calculation indicates that Exxon's value has increased by about $20 billion this week. How many senior executives in the oil industry have made millions in stock increases even as their oil rigs are torn apart? If the companies simply said that they would freeze prices temporarily and, when the situation stabilized, promised not to increase profits related to Katrina, the stocks wouldn't be jumping.

I'm not talking charity, just fairness and humility. Sure, there's a Chevron relief fund. Shell will kick in cash. Halliburton will..well maybe not Halliburton, but you get the point. Charity is no substitute for justice and equity. The oil companies could do a whole lot more simply by making the executive decision not to profiteer.