09:25 GMT +315 December 2019
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    The Slump Continues: US Energy Giants Announce Massive Losses

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    Last week Exxonmobil reported its lowest quarterly profits since 1999; the company's profits from April-June this year declined by 59 percent compared to the same period last year.

    Chevron, Exxonmobil and ConocoPhillips all announced below-expectation quarterly profits last week, as the industry struggles with low commodity prices and weak profits from refining crude oil into gasoline and diesel.

    On Friday Exxonmobil, the world's largest publicly traded international oil and gas company, reported that in the second quarter its net income slumped to $1.7 billion, or 41 cents per share, in comparison to $4.19 billion, or $1 per share, a year before.

    Houston-based oil and gas company ConocoPhillips also reported declining fortunes. In the second quarter of 2016 it posted a second-quarter net loss of $1.1 billion, down from a second-quarter 2015 net loss of $179 million. 

    California-based Chevron multinational energy corporation continued its slump with a third straight quarterly loss, its longest downturn in fortunes for 27 years. 

    Its losses in the second quarter loss were the company's worst since 2001. It posted a net loss of $1.47 billion, or 78 cents per share, compared with a net profit of $571 million over the same period last year.

    The companies reported that in addition to low energy prices, wildfires in oil-rich regions of Canada in recent months also had negative impact on profits

    "The second quarter results reflected lower oil prices and our ongoing adjustment to a lower oil price world," commented Chevron Chairman and Chief Executive John Watson.

    Since the sharp drop in the oil price at the end of 2014, oil producers in the US had to some extent been able to offset low prices because of their relatively high profits on refining.

    Before the US government lifted its 40-year ban on oil exports in January, its producers were able to refine crude oil into gasoline and diesel more cheaply than some competitors, which gave them an edge overseas export markets.

    Exports from the US of gasoline and other fuels rose by 38 percent between 2010 and 2015, to 2.8 million barrels a day.

    However, since the beginning of this year US companies have been allowed to export crude oil, which has contributed to a global oil glut that is keeping prices low

    On Friday, US West Texas Intermediate (WTI) crude oil closed at $41.40 per barrel, a four percent decline from the start of the week. The industry benchmark Brent crude closed at $42.46 per barrel, a decline of 5.3 percent since July 25.

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    Tags:
    profit, oil prices, oil production, United States
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