In a filing with the US Securities and Exchange Commission ahead of its third-quarter report later this month, Exxon Mobil has signaled that oil companies, large and small around the world, will report significant profit gains due to a 30% jump in prices in the September quarter.
The company anticipates a $1 billion earnings boost for the quarter, with a substantial portion of it stemming from the favorable impact of higher petrol prices. Consequently, the company's share price hit an all-time high of $120 a share last Thursday. However, the shares slid 4% on Wednesday to just over $111 each after global prices fell by 5%, marking the largest one-day drop in 2023.
Exxon disclosed in the regulatory filing that it expects higher liquids prices to add $900 million to $1.3 billion to the profit from its Upstream division compared to the previous fiscal quarter. Moreover, higher gas prices are expected to contribute $200 million to $600 million to Upstream earnings.
Despite changes in industry margins slightly boosting its energy products earnings, changes in unsettled derivatives are projected to have a negative impact on the division. Tighter profit margins in its chemical products and specialty products businesses are also expected to reduce profit in those segments.
America's largest oil producer posted $4.6 billion in upstream earnings for the second quarter ending June 30, with a total profit of $7.9 billion in the same period. Exxon is forecasting an operating profit ranging from $8.3 billion to $11.4 billion for the September quarter, falling far short of the third-quarter 2022 record earnings figure of $19.7 billion, mainly due to the then-high natural gas prices and record refining throughput.
Oil and gas production profits were boosted by a 30% increase in average crude oil prices during the period, with the Brent global benchmark ending the quarter near $97 per barrel, up from $72 per barrel at the end of June. In the third quarter of the previous year, oil and gas production delivered operating income of $12.4 billion, and its oil-refining business earned $5.8 billion.
Exxon, along with the US Number 2 company, Chevron, is due to report their third-quarter earnings on October 27.