Volatile crude prices and weak refining margins led to lower earnings at all five oil supermajors in the first quarter of 2019, suggesting that Big Oil shouldn’t stay complacent several quarters after the industry emerged from one of the worst downturns in a generation.
Big Oil’s five majors—ExxonMobil, Chevron, BP, Total, and Shell—reported over the past two weeks a mixed bag of results for Q1. While net earnings at all companies were lower than last year’s first quarter on the back of lower average Brent Crude prices compared to Q1 2018 and weak refining margins that battered downstream earnings, some supermajors met and even exceeded analyst expectations thanks to strong trading profits and to their natural gas businesses.
The European majors fared better than the U.S. firms Exxon and Chevron, and it was a European company that topped its rivals and analyst estimates, reporting the smallest yearly drop in profit in Q1, thanks to the liquefied natural gas (LNG) and trading divisions—Shell.
The Q1 earnings season began with the U.S. supermajors reporting lower profits compared to a year ago, with earnings squeezed by weak refining margins and volatile oil prices and Exxon badly missing on both earnings and revenues.
Exxon’s upstream liquids production rose by 5 percent annually, driven by a nearly 140-percent jump in Permian unconventional growth. Yet, downstream operations were hit by heavier…