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Exxon has warned that its first-quarter income figures will be affected by lower oil prices, Reuters has reported, citing a securities filing.
Besides lower oil benchmarks, the company also pointed to weaker gas prices and a sizeable loss from its fuel derivatives business, the report noted.
Per the filing, Exxon will report an operating result of $6.65 billion for the first three months of 2024, down from a record $11.6 billion a year earlier and also down from the fourth-quarter 2023 result, which stood at $7.63 billion.
In the first quarter of 2023, oil prices were trading around levels that were a little lower than current price levels. Yet they were substantially lower than the prices oil markets saw in the first quarter of 2022 after the Russian invasion of Ukraine.
Natural gas prices fared a lot worse as strong supply from the shale patch in the United States kept the benchmarks severely depressed, leading to producers cutting production and boosting their drilled but uncompleted well inventories in anticipation of higher prices. This price weakness cost Exxon some $600 million compared to the previous quarter, according to the filing cited by Reuters.
However, the biggest loss came from its fuel derivatives business, at a hefty $1.1 billion compared to the fourth quarter of 2023. According to the company, this loss offset gains in gasoline and diesel margins during the first quarter of 2024.
Last year, Exxon booked its second-highest full-year profits for the last 10 years. The figure came in at $36 billion, beating analyst expectations. The supermajor also generated $55.4 billion of cash flow from operating activities and distributed a record $32.4 billion to shareholders in 2023.
These strong results gave Exxon the financial comfort to go on a shopping spree that resulted in the acquisition of Pioneer Natural Resources and carbon storage firm Denbury.
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The post Exxon Warns Q1 Profits Will Suffer Due to Lower Oil Prices appeared first on Energy News Beat.
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