Exxon expects weak gas prices to offset gains from higher crude prices
Exxon Mobil Corp said on Monday that in the second quarter it expects higher oil prices and refining margins compared to the prior quarter, but the gains will be offset by lower natural gas and weaker margins in its chemicals business.
The U.S. oil major said in a filing bit.ly/2RL5hMp it expected change in crude prices to boost second-quarter profit by $400 million to $600 million. However, lower gas prices were expected to offset it by an equal measure.
Natural gas prices have dropped to multi-year lows in the face of tepid demand and amid an economic slowdown and escalating global trade tensions, especially between the United States and China.
Weaker margins from its chemical business is expected to impact the company’s second-quarter profit by $100 million to $300 million, Exxon said.
It also estimated a potential second-quarter gain of $200 million over the first quarter from a lack of impairment charges.
The company reported first-quarter profit of $2.4 billion, but missed forecasts due to a weakness across its major businesses. This was 38.6% lower than the profit it posted in the second quarter of last year.
Analysts on an average were expecting Exxon to post a profit of $4.34 billion in the second quarter this year, according to IBES data from Refinitiv.
Exxon shares, which have risen about 12% up to Friday’s close, gained 0.9% to $77.33, compared with a 1.15% rise in the S&P 500 Energy index on Monday.