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Exxon expects to report strong financial results for the third quarter of the year after smashing previous profit records in the second quarter on the back of the oil and gas price rally.
Per a Reuters report citing a snapshot issued by the supermajor, Exxon could book a third-quarter net profit close to its second-quarter record of $17.9 billion.
Average oil prices in the third quarter were $98 per barrel of Brent, which was substantially lower than the $109-per-barrel average in the second quarter, but still high enough to boost profits.
Natural as prices on international markets in the period averaged $7.95 per million British thermal units, however, up from $7.17 million per mmBtu in the second quarter, Reuters also noted.
Exxon booked second-quarter earnings of $4.21 per share assuming dilution. This is nearly quadruple the $4.69 billion in earnings for the second quarter of last year, and more than triple the earnings from the first quarter of this year. Exxon’s earnings per share easily beat the analyst consensus of $3.84.
Higher oil and gas prices, the highest refining margins in years, increased production, and aggressive cost control all contributed to the record-breaking profits at Exxon, which beat its previous quarterly earnings record from 2012 and the quarterly profits from 2008 when Brent prices hit a record $147 per barrel.
Now, despite the almost 25-percent slide in oil prices during the third quarter of the year, price levels remained conducive to higher profits, especially coupled with the increase in gas prices on international markets demand continued to outstrip supply.
The outlook for the immediate term is bullish, too, as the market anticipates a deep production cut from OPEC+, which would push oil prices significantly higher, creating yet another potential windfall for the industry, in which Exxon is among the biggest players.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com