Driven by recovery in oil prices, Chevron has swung back to profit in the first quarter of 2021 after reporting losses in the previous three quarters even though its quarterly profit plummeted by 62% compared to last quarter.

The oil giant’s profit for three-month-period ending 31 March 2021 was $1.38bn, compared to a profit of $3.6bn reported a year ago and a $665m loss in the previous quarter.

The year-on-year drop was driven by various factors including winter storm losses, lack of tax items that benefited the prior year figure and downstream margin.

Total revenues and other income increased to $32.03bn from $31.5bn.

The firm’s total upstream operations generated earnings of $2.35bn in the first quarter, versus $2.92bn a year earlier.

Of this figure the US upstream operations contributed $941m while international operations accounted for $1.41bn. The comparable figures in the first quarter of 2020 were $241m and $2.68bn, respectively.

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By GlobalData

Downstream operations in the US reported a loss of $130m in the first quarter 2021, versus earnings of $450m in the previous year. Earnings of international downstream operations dropped to $135m from $653m.

Total downstream earnings declined to $56mfrom $1bn over the period.

Production in the first quarter decreased to 3,121 million barrels of oil equivalent a day (mmboe/d) compared to 3,235 mmboe/d in the prior year.

Excluding working capital effects, cash flow from operations in the first quarter of 2021 was $5.1bn, as against $5.8bn a year ago.

Chevron said that it will increase its dividend by 4%, indicating a rebound in business after the Covid-19 storm.

Chevron chairman and CEO Mike Wirth said: “Earnings strengthened primarily due to higher oil prices as the economy recovers. Results were down from a year ago due in part to ongoing downstream margin and volume effects resulting from the pandemic and the impacts of winter storm Uri.

“We maintained capital discipline with capital spending down 43 percent from last year. We realised cost efficiencies from last year’s restructuring and the integration of Noble Energy.”