(Oct 16): ExxonMobil Holdings Corp is the latest oil supermajor to signal soaring third-quarter refining profits as wars in the Persian Gulf and Russia crippled fuel-making facilities causing prices to surge.
Higher refining margins added about US$4.5 billion (RM18.37 billion) to ExxonMobil’s results, the company said in a preliminary earnings statement on Friday. That’s on top of the US$4.1 billion the company made from refining in the second quarter.
After accounting for other items, analysts are expecting ExxonMobil’s refining earnings to be about US$7.8 billion in the third quarter, which would be the company’s highest on record, according to data compiled by Bloomberg.
North America’s biggest oil producer is scheduled to report its full results on Oct 30. ExxonMobil shares rose as much as 1.5% on Friday.
European supermajors have also indicated strong refining margins after fuel production became a critical pinch-point amid broader energy market disruptions amid the US-Iran and Russia-Ukraine conflicts. The loss of production in these regions means fuels like diesel are in short supply globally, driving up prices. ExxonMobil runs the world’s largest refining system outside of China.
The Gulf Coast 3-2-1 crack spread, an indication of US refining profitability, was 28% higher in the quarter on a sequential basis, touching a record US$72.64 on Sept 22. US retail prices for diesel, used in heavy-duty transportation and farm equipment, touched a record US$6.53 a gallon last month.
ExxonMobil’s surging profits will be partly offset by lower oil prices, which reduced profits by about US$1.3 billion. It will also take a US$2.5 billion hit due to “timing effects”, or derivative positions linked to cargoes that have been shipped but not yet delivered.
Chief executive officer Darren Woods has invested heavily in ExxonMobil’s refineries over the past decade, leaving it well-placed to take advantage of current prices. Previously the company’s refining boss, Woods spent billions of dollars upgrading and expanding refineries in Texas, Singapore, Belgium and the UK.
Uploaded by Felyx Teoh