American and European oil firms reported dampened quarterly results this week as natural gas prices declined in comparison to last year. The companies missed market expectations as they continued to withdraw from the peak levels seen in 2022, a result of a surge in the post-pandemic demand and high prices after Russia’s invasion of Ukraine.
Major oil firms such as Exxon Mobil in the US said that they did not meet expert targets on fuel derivatives in their results for the January to March quarter. However, Chevron surpassed moderate expectations and clocked better-than-expected oil production figures in the US. French oil firm, TotalEnergies, also managed to beat predictions given by the analyst as strong refining margins helped balance the decline in profits from natural gas, Reuters reported.
While Exxon saw a fall of 28 per cent in profit, Chevron clocked a decline in profit by 16 per cent, both on a year-on-year (YoY) basis. Both the US firms observed an impact on profits from gasoline and fuels.
TotalEnergies also reported a plunge in profit by 22 per cent against the same period a year earlier. The firm’s CFO, Jean-Pierre Sbraire, noted, “European gas prices declined by 35 per cent, reflecting a mild winter and high storage levels.”
Notably, the US gas benchmark, Henry Hub futures, remained below $1.70 per million British thermal units (mmBtu), while it crashed earlier this year to touch a new low in three and a half years owing to warm weather and oversupply.
Brent crude, the global oil benchmark, also reported a flat trend in prices at $81.76 a barrel in the quarter, against the same period a year earlier. Currently, oil prices are ranging around $90 and this essentially means attractive refining margins seen earlier this year are expected to dampen.
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The companies did not provide any guidance regarding their production estimates for the upcoming quarters, denting investor sentiments.
