This one chart tells you everything you need to know about Exxon, Chevron and BP's forecast-beating earnings
By Steve Goldstein
Refinery margin strength boosted the key oil majors in the third quarter.
One slide in ExxonMobil's investor presentation after its third-quarter earnings explains the financial situation for the integrated oil giants very neatly.
The knee-jerk answer might be, $100-per-barrel crude-oil prices (CL00), but that's not really the case - oil prices are not all that different than last year or in fact the 10-year average. Natural-gas prices are a little stronger, and chemical margins are in fact worse.
How prices compare to their 10-year average.
But look at refining margins - wildly higher than anything the industry has experienced during the previous decade.
The war in Iran - and to a lesser extent, Ukraine's bombing of Russian refineries - has tightened the supplies of diesel, after a decade of refining capacity being brought offline due to what had been poor margins as well as the shift to biofuels.
It was refining margin strength that boosted profits at Exxon (XOM), Chevron (CVX) and BP (BP).
The State Street Energy Select Sector SPDR ETF XLE was on track in early trading to close at a new record high.
Exxon and Chevron entered Friday with both stocks rising 52% this year, as BP's American depository receipts have gained 45%.
Exxon said U.S. Gulf Coast crude unit utilization was running at 100% as it saw the second-highest U.S. Gulf Coast diesel volume on record. Chevron said it had record quarterly U.S. crude throughput as BP refining availability was 96.5%.
The strategy, particularly at Chevron and BP, is to use these banner profits to reduce debt, as opposed to increasing capital expenditure or returning a greater proportion of profits through dividends and buybacks.
-Steve Goldstein
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(END) Dow Jones Newswires
10-30-26 1017ET
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