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    Low Oil Prices Pinch Exxon and Chevron Earnings By CLIFFORD KRAUSS APRIL 29, 2016
    2016-05-01 10:43:09

    HOUSTON— The two mightiest American oil companies don’t look so mighty any more.

    With oil and natural gasprices at record lows and refining profit margins weakening,Exxon Mobilon Friday posted its smallest profit for any quarter since 1999, whileChevronreported a large first-quarter loss of $725 million, in contrast to a gain of $2.6 billion in the period a year earlier.

    Weak results were expected, given that oil prices plunged to below $30 a barrel during the first quarter — a 13-year-low — while natural gas prices fell to their lowest level in nearly 17 years. Investors were mixed on the results; Exxon Mobil shares closed about 0.4 percent higher and Chevron’s fell 0.2 percent.

    The oil and gas industry has weathered its most severe crisis since the price collapse in the 1980s. There have been at least 62 oil and gas company bankruptcies over the last year or so, and roughly 120,000 American oil and gas workers — nearly one out of four nationwide — have lost their jobs.

    Worldwide, oil companies have debts surpassing half a trillion dollars, which energy experts say will force many to sell assets to meet interest payments.

    Neither Exxon Mobil nor Chevron is going out of business soon, and their large refinery businesses, which benefit from low oil and gas prices, have helped both survive the downturn better than most of their competitors.

    Nevertheless, Standard & Poor’s this week slashed Exxon Mobil’s coveted AAA rating to AA+, citing the near tripling of the company’s debt to almost $20 billion last year from 2013 as it struggled to replace reserves. The move came after wholesale ratings cuts to virtually the entire oil and gas industry. Showing its confidence in its future, however, Exxon Mobil raised its dividend slightly the next day.

    Wall Street analysts said that Exxon Mobil’s results for the first quarter were actually better than expected. Exxon, which is based in Texas and is the biggest American oil company, reported a quarterly profit of $1.8 billion, down from $4.9 billion in the first quarter of 2015. Revenue in the 2016 quarter dropped 28 percent, although strong results from its chemical production helped keep the company in the black. The company said it cut its capital spending by a third to protect its balance sheet.


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