The world’s largest oil companies had an “ugly” second quarter, with earnings hit by a halving of oil and gas prices, sharply lower refining margins and stubbornly high costs, reports Reuters.
The oil and gas sector is expected to report a 62% drop in second-quarter earnings compared to 2008, and a 27% decline compared to the first quarter of 2009, according to analysts at Citigroup.
The quarter-on-quarter decline comes despite a recovery in crude prices to almost $60 a barrel from around $44 in the first quarter.
The decline also reflects continued weakness in gas prices and crude processing margins and, for many, lower production, writes Reuters.
Exxon Mobil, the world’s largest non-government controlled oil company by market capitalisation, is expected to report second quarter net income of $4.75bn, down 59% on April-June 2008, according to Reuters Estimates.
Chevron is forecast to post a 70% drop in net income to $1.82bn.
Europe’s largest oil company, Royal Dutch Shell, is predicted to report a 70% fall in current cost of supply net income, excluding one-off items, with an average forecast of $2.55bn in a Reuters poll.
BP was forecast to report a replacement cost net income, a 67% drop on the year.