America’s two biggest oil supermajors, Exxonmobil and Chevron, both missed earnings expectations despite today posting profits in the billions of dollars.
Exxonmobil, the world’s largest listed oil producer, earned $3.4bn (£2.6bn) in the second quarter of 2017, while Chevron’s earnings were $1.5bn.
Oil companies have been boosted in recent months by higher oil prices. The price of West Texas Intermediate (WTI) crude, the North American benchmark, fell below $30 at the start of 2016, but has since recovered.
While current levels just below $50 per barrel are still far below mid-2014 prices above $100, they have proven enough to take the pressure off oil companies. Firms were also forced to slash spending during the more austere times, making them more profitable when prices rose.
The American oil giants joined their British rivals in posting healthy profit rises in the most recent quarter.
For the second quarter of 2017 earnings per share at Exxonmobil reached 78 cents, a 90 per cent increase year-on-year. However, that missed analyst consensus expectations collated by Zacks Equity Research of 83 cents.
Exxon’s earnings were boosted by a fall in capital expenditures as it reined back on exploration.
Darren Woods, Exxonmobil’s chairman and chief executive, said the results were “solid”, pointing to higher oil prices and a focus on business operations behind the earnings increase.
The rise in earnings came despite a one per cent fall in oil production, to 3.9m barrels per day compared to the equivalent quarter last year.
Chevron, meanwhile, swung back to profit after recording a $1.5bn loss during the equivalent period last year. Profit over the first half of 2017 rose to $4.1bn, a striking turnaround from the $2.2bn loss in the first half of 2016.
Chevron reported identical earnings per share to Exxonmobil of 78 cents, undershooting a consensus of 89 cents.
John Watson, chairman and chief executive of Chevron, said: “Second-quarter results improved substantially from a year ago and year-to-date net cash flow is positive.”