Exxon Mobil has indicated a potential decrease in its third-quarter upstream earnings, estimating a drop of $600 million to $1 billion due to a significant slump in oil prices. The company highlighted that oil prices fell by 17% during the quarter, marking the largest decline in a year, with Brent futures settling at $71.77 per barrel by the end of the quarter.
In addition to lower oil prices, Exxon also expects weaker refining margins to impact profits, estimating an additional loss of up to $1 billion. The global fuel market has been adversely affected by reduced consumer and industrial demand, particularly in China, where economic growth is slowing and the adoption of electric vehicles is increasing.
Exxon reported upstream earnings of $7.07 billion in the second quarter and a net profit of $9.1 billion in the same quarter last year, equating to $2.25 per share. Analysts project an adjusted profit of $1.97 per share for the third quarter, based on estimates from LSEG.
As of Thursday, Exxon shares closed at $122.58, with a slight increase of 1 cent in after-hours trading.