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Profits For Big Oil Companies Decline As Natural Gas Prices Plummet.

Profits For Big Oil Companies Decline As Natural Gas Prices Plummet.
A significant decline in natural gas prices from a year ago was the reason behind the lower first quarter earnings that U.S. and European oil corporations released on Friday.
Oil and gas companies' 2022 record highs, which were driven by a rise in demand following the COVID-19 pandemic and higher pricing following Russia's invasion of Ukraine, are still being surpassed by worse results today.
In the United States, Chevron outperformed tempered forecasts with better-than-expected U.S. oil output, but Exxon Mobil missed Wall Street earnings projections on fuel derivatives.
The large French oil company TotalEnergies also marginally outperformed expert estimates due to strong refining margins offsetting a sharp decline in natural gas revenues.
"European gas prices declined by 35%, reflecting a mild winter and high storage levels," said TotalEnergies Chief Financial Officer Jean-Pierre Sbraire.
The year-over-year decline in Exxon's profit was 28%, Chevron's was 16%, and TotalEnergies' was 22%. The two largest U.S. oil companies also suffered from lower fuel and petrol earnings.
The benchmark for US gas, Henry Hub futures, opens new tab, has been trading below $1.70 per million British thermal unit (mmBtu) and fell to a 3-1/2-year low early this year due to warm weather and oversupply.
In the quarter, global benchmark Brent crude prices, which were $81.76 per barrel, were essentially unchanged from a year earlier.
Due to geopolitical concerns and OPEC+ output constraints, TotalEnergies expects its refining business to be less profitable in the second quarter and beyond. However, higher oil prices, which are presently trading around $90, imply that lucrative oil refining margins from earlier this year are projected to decline.
On Thursday, mining behemoth BHP made an almost $39 billion acquisition bid for Anglo American, creating the largest copper miner in the world.
Due to their profitable year prior, Exxon, Chevron, and Occidental Petroleum made bids for competitors in an effort to increase their output of oil and gas.
Chevron made $5.5 billion, TotalEnergies produced $5.1 billion in adjusted net income, and Exxon reported a $8.5 billion profit—its second-highest first-quarter profit in almost a decade.
In late New York trade, Exxon's share price fell 2.6%, while Chevron's fell less than 1%, reflecting the declines in profits. The confirmation of a $2 billion share purchase by TotalEnergies resulted in a 2.09% increase in share price in Paris.

Christopher J. Mitchell

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