Last week marked a busy few days, with energy majors Exxon Mobil, TotalEnergies and Chevron reporting first-quarter results on Friday. Exxon missed Wall Street estimates after taking a hit from weak natural gas prices, while Chevron and TotalEnergies both beat expectations.
Across the board, profits are down sharply year-on-year and well below records seen in 2022 after a surge in post-COVID-19 demand and Russia’s invasion of Ukraine roiled markets and led to bumper profits.
Year-over-year, Exxon’s profits were off 28%, Chevron’s fell 16% and TotalEnergies was down 22%. Earnings from Exxon’s oil and gas production fell 14%, while its refining unit saw a 67% decline on weaker fuel margins, mark-to-market derivatives and higher maintenance costs.
Chevron did a little better, beating estimates as its oil volumes rose some 35% from a year ago due to its acquisition of PDC Energy and output in the Permian and Denver-Julesburg basins. While both U.S. majors took a hit from weaker fuel profits, TotalEnergies was able to offset weak natural prices with good refining margins.
In the U.S. downstream world, refiner reports were mixed. Valero topped estimates, supported by strong demand from outages at Russian facilities following Ukrainian drone attacks and maintenance at U.S. refineries.
Phillips 66, however, missed as realized margins were down 47% due to seasonal maintenance at its plants, including catalytic units on the U.S. Gulf Coast. The company also reported a $180 million loss during the quarter related to its renewables conversion project at its Rodeo, California refinery.
We’ve got a lot more ahead this week, with Marathon Petroleum reporting on Tuesday, Shell and ConocoPhillips on Thursday and a slew of natural gas and shale companies in between.
Natural gas, which is still trading below $2 per million British thermal units (mmBtu) and traded negative in places like the Permian at the end of the quarter, will likely remain a major theme. And as always, we’ll be on the lookout for any interesting comments around U.S. production, which continually surprises to the upside.
