Exxon announces Q2 profit surge as oil prices rise.
Exxon Mobil, the U.S. oil major, said on Tuesday that it expects its second-quarter earnings to increase by about $5 billion compared to the prior quarter. This is because the price of oil spiked due the U.S. - Israel war against Iran. The company's margins for refining also improved. Investors closely monitor Exxon’s earnings snapshot to get a sense of how oil companies will perform in the second quarter. Oil markets were impacted by the geopolitical risks associated with the conflict in Middle East, which began in February. It virtually closed down the Strait of Hormuz for months, which is responsible for about a fifth of all global oil flows. Benchmark Brent crude had an average closing price per barrel of $96.68 during the April-June period, up by 23% compared to the first three months of the year. Prices rose to $109.27 per barrel in April, the first time they have done so since 2012. According to Exxon, the upstream segment's profits could increase by $1.6 billion. According to Exxon’s regulatory filing, the timing effects could boost earnings from refining by $2.6 billion. Exxon suffered a multi-billion-dollar loss in the first quarter because of financial hedging relating to cargo deliveries. The company said that these positions would 'unwind' and result in profitability for subsequent quarters. The filing stated that disruptions due to war could hurt the second-quarter profit across upstream and downstream by around $1 billion.
The company will announce its second-quarter results on July 31. According to LSEG's consensus estimates, analysts expect Exxon will report $15.7 billion of?adjusted profits for the quarter. This is about triple what they reported in the first quarter. This could raise eyebrows for Americans who are feeling the pain at the gas pump. U.S. president?Donald Trump urged oil companies to lower gas prices. Reporting by Sheila Dang from Houston and Dharna Baffna from Bengaluru. Editing by Joyjeet Das and Maju Samuel.
(source: Reuters)
