A discussion of Exxon Mobil (XOM) is full of superlatives. It is the world’s largest oil & gas company. It is the largest natural gas producer in the North America. With a capacity of 5.8 million barrels a day, it is the largest oil refiner in the world, followed distantly by Shell (RDS.A). As a chemical company, it has the highest return on capital among its peers. It has more oil reserves than any non-national oil company except for the Russian giants Gazprom and Rosneft, which, though they are exchange traded, are nevertheless state-controlled. The top five all-time annual earnings for a corporation are all from Exxon, with the best year coming in 2008, as oil prices skyrocketed and the world’s economies plunged.

Exxon makes most of its money on oil and gas production, but its position as an oil refiner, chemical producer and marketer of refined products gives it some protection when oil and gas prices are falling. The company has refinery capacity in the North America, Europe, Asia and the Middle East. Its chemical complexes are similarly distributed.

Is Exxon a good investment? Part of the answer depends on what happens to the price of oil. At the beginning of the year, it looked like 2012 might be a replay of 2008, when West Texas Intermediate (WTI) spiked above $140 per barrel, and gas prices were $4 or more per gallon. WTI did manage to trade above $110 and some were predicting $5 per gallon gas prices over the summer, but it did not happen.To continue reading, click here.