The drop in oil consumption resulting from the pandemic-caused drop in demand generated crowds of analysts happy to report the death of the oil industry. Those reports, just like those of Mark Twain’s death in 1897, were greatly exaggerated. Exxon and Chevron are reporting surging profits. The FT‘s Justin Jacobs and Derek Brower report:
ExxonMobil and Chevron surged back to profit in the first quarter as the crude price rally helped repair Big Oil’s finances after the huge pandemic-induced losses of 2020.
Exxon reported net earnings of $2.7bn, up from a loss of $610m a year earlier and a loss of more than $20bn in the final three months of 2020. It was the first quarter of profit since 2019.
Chevron posted a profit of $1.4bn, down from $3.6bn a year earlier, snapping a three-quarter losing streak.
The return to profit marked a sharp turnround from a year when US oil operators were forced to slash spending, pile on debt and rein in output growth ambitions as collapsing crude markets inflicted billions of dollars in losses.
“The strong first-quarter results reflect the benefits of higher commodity prices and our focus on structural cost reductions”, said Darren Woods, Exxon chief executive.
Woods said cash flow from operating activities during the quarter “fully covered the dividend and capital investments” and helped reduce debt.
Both companies reported strong performance in their exploration and production businesses, which were buoyed by higher crude and natural gas prices.
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