Exxon Mobil to Exit Retail Gas Business

Exxon Mobil (XOM Quote - Cramer on XOM - Stock Picks) said Thursday that it's getting out of the U.S. retail gasoline business and will sell its portfolio of company-owned gas stations.

The portfolio includes 820 self-operated retail outlets, as well as roughly 1,400 gas stations that are managed by dealers.

While oil companies are under heavy scrutiny for the enormous profits now being made with crude selling for well over $100 a barrel, major integrated companies such as Exxon, Chevron (CVX Quote - Cramer on CVX - Stock Picks) and ConocoPhillips(COP Quote - Cramer on COP - Stock Picks) have seen the profitability of their refining and marketing segments get hammered.

This past spring, nuances in the supply, demand and refinery production in the gasoline market kept spot and futures prices for motor gasoline well below their fair-market price. At the same time, gasoline's crack spread, which reveals the profit made by converting crude oil into gasoline, actually went negative for a short period of time.

About 10 major integrated oil companies operate globally, and they are now engaged in fierce competition with one another over a growing base of customers in emerging markets and shrinking supplies of raw commodities in the ground. When one of them makes a strategic move that will significantly affect its cash flows, as Exxon is now doing, the others tend to follow quickly.

However, don't expect to see a gas-station fire sale anytime soon -- an Exxon Mobil representative said that the station sales would occur over a multiyear period.

Most gas stations in the U.S. that bear the Exxon brand-name are not owned by the parent corporation, but rather are owned by gasoline distributors. Exxon Mobil is one of a cluster of major oil companies from whom these distributors can buy their gas.

Independent gas stations can choose to continue to operate under the Exxon brand name in exchange for licensing fees.