ExxonMobil and Chevron smashed profit records in the second quarter, as rising energy prices following Russia’s invasion of Ukraine provided a boost to the US oil giants.
The huge gains come as consumers balk at skyrocketing fuel costs that have helped drive inflation to levels not seen in decades across the US and Europe, threatening a political backlash against energy companies.
ExxonSecond-quarter net income was $17.9 billion, beating analysts’ estimates of $16.9 billion, according to data compiled by S&P Capital IQ. The company’s previous quarterly profit was $15.9 billion in 2012, another year of rising oil prices.
misfortuneQ2 earnings were $11.6 billion, also its highest quarterly profit and easily beating consensus estimates of $9.9 billion.
“Earnings and cash flow benefited from increased production, higher realizations and tight cost control,” said Exxon CEO Darren Woods.
The blockbuster earnings followed UK-based Shell on Thursday report Its record breaking second quarter in a row with an adjusted profit of $11.5 billion. of France TotalEnergies That same day, he said that profits in the quarter jumped to $9.8 billion, almost three times as much as the same period a year ago.
The five Western oil companies – Exxon, Chevron, Shell, BP and TotalEnergies – are collectively on track to generate profits of more than $50 billion in the three months to the end of June.
Italian rival Eni also reported good quarterly results on Friday, boosting returns for investors after a four-fold rise in adjusted net profit to 3.81 billion euros.
Exxon and Chevron’s “downstream” oil refining businesses have fueled their rising results after profit margins from selling refined fuels above the cost of buying crude oil exploded to record highs.
In the US, the national average fuel price rose to a record of more than $5 a gallon in June, although it has since declined.
The cash bonanza for Big Oil has sparked attacks from politicians and led to growing calls for excessive tax on profits, which companies in the UK and elsewhere face. US President Joe Biden said last month that Exxon was making “more money than God” and promised to “make sure everyone knows Exxon’s profits.”
Exxon and Chevron responded by saying they were increasing spending on new supply to help meet rising demand. However, their capital expenditures remained much lower than before the pandemic and they favored increasing dividends and share buybacks.
Woods pointed to the company’s production growth at U.S. Permian shale oil and gas fields in Texas and New Mexico, which Exxon said is up 130,000 barrels of oil equivalent per day compared to the first half of 2021.
Pierre Barber, Chevron’s chief financial officer, said he expects the company to increase spending next year as the company responds to higher demand.
“Our budget this year is around $15 billion and our guidance through 2026 is $15 to $17 billion a year, so that gives us $2 billion of room to grow. . . . You should see higher capital than us in 2023,” he said, pointing to The Permian as an area expected to increase production.
Exxon’s quarterly revenue rose 71% year over year to $115.7 billion, while Chevron rose more than 80% to $68.8 billion. Exxon shares jumped 3.5 percent to $95.89 early Friday, while Chevron rose 7.1 percent to $161.04.
The outlook for major oil companies has darkened in recent weeks as central banks around the world quickly raise interest rates to fight inflation, largely due to the effects of soaring energy prices, raising concerns about a global Economic slowdown.
The widening economic concerns led to a big sell-off in oil and gas stocks, even with expectations of notable gains, although their prices remained higher than this year and outperformed the market.
ExxonMobil and Chevron shatter profit records after global oil price surge Source link ExxonMobil and Chevron shatter profit records after global oil price surge