Exxon, Chevron Post Record Revenues

An oil field in the United States (Reuters)
An oil field in the United States (Reuters)
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Exxon, Chevron Post Record Revenues

An oil field in the United States (Reuters)
An oil field in the United States (Reuters)

The two largest US oil companies, Exxon Mobil Corp and Chevron Corp, posted record revenue in Q2 2022 on Friday.

With crude surging above $100 a barrel shortly after the Russian invasion on Ukraine, and refining margins climbing due to tight plant capacity, ExxonMobil reported $17.9 billion in profits and Chevron $11.6 billion in the just-finished second quarter.

The results come on the heels of similarly jaw-dropping figures from European petroleum heavyweights, with Shell reporting $18 billion in profits, Total Energies $5.7 billion and Eni $3.8 billion.

Crude prices traded between $95 and $120 a barrel during the quarter, as the war and the wave of sanctions on Moscow lifted the oil market back to levels last seen in 2008.

On Friday, both companies reported higher oil and natural gas volumes in the United States, with ExxonMobil boosted by an increased 130,000 barrels of oil-equivalent in the Permian Basin in Texas and New Mexico, and Chevron notching a three percent rise in US volumes.

ExxonMobil plans to add 250,000 barrels per day of refining capacity at its Beaumont, Texas plant in the first quarter of 2023, representing “the industry's largest single capacity addition in the US since 2012,” ExxonMobil Chief Executive Darren Woods said in a news release.

Both companies reported big increases in revenues, with Exxon Mobil's jumping 71% to $115.7 billion and Chevron 83% to $69 billion.

This rise is considered one of the main factors behind the global inflation that hit unprecedented levels for decades in the United States and Europe.

Inflation is already changing where Americans go and what they eat. It's also changing the way they consume energy. Inflation in Europe has also been surging, including soaring costs for energy.

The two companies, which suffered significant financial losses early in the COVID-19 pandemic as petroleum demand tanked, have not used the mountains of cash from higher prices to significantly lift capital spending, which remains below the level prior to the pandemic.

Instead, the companies have been steering funds to shareholders. ExxonMobil paid out $7.6 billion in distributions during the quarter, while Chevron lifted the top end of its annual share repurchase range to $15 billion from $10 billion.

Shares of ExxonMobil jumped 4.1% to $96.39 in trading near midday, while Chevron leaped 8.5% higher to $163.19.

The ensuing surge in US gasoline prices to an all-time high in mid-June has squeezed American families and pressured President Joe Biden, who has had a fractious relationship with ExxonMobil and Chevron and the oil industry more generally.

In June, Biden ripped the industry for spending excess cash on share buybacks instead of significantly boosting capital spending.



Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
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Gold Hits One-month High as Prospects for Fed Cuts Rise on Softer US Inflation Data

Gold prices firmed near one-month highs hit earlier on Thursday - File Photo
Gold prices firmed near one-month highs hit earlier on Thursday - File Photo

Gold prices firmed near one-month highs hit earlier on Thursday after a softer-than-expected core US inflation print increased chances of two Federal Reserve rate cuts this year, with the first likely in June.

Spot gold gained 0.3% to $2,704.56 per ounce as of 0934 GMT after hitting its highest level since Dec. 12 earlier in the session. US gold futures gained 0.7% to $2,736.50.

Further gains in safe-haven bullion were, however, limited as Hamas and Israel reached a deal for a ceasefire in Gaza after 15 months of conflict and heightened Middle East tensions, according to Reuters.

Gold rallied to multiple-record highs and is still up nearly 50% since the war began in October 2023.

"Although de-escalating geopolitical tensions can dilute demand for safe havens, bullion is still holding on to most of its post-CPI gains, suggesting that the Fed rate outlook remains the primary driver for gold prices," said Exinity Group chief market analyst Han Tan.

"Gold should find itself in a supportive environment, so long as market participants can hold on to expectations for Fed rate cuts in 2025."

Interest rate futures traders are pricing in near-even odds that the Fed would reduce rates twice by the end of this year, with the first reduction to come in June. Before the inflation data on Wednesday, futures were only pricing a single quarter-point interest-rate cut in 2025.

Core US inflation increased 0.2% in December after rising 0.3% for four straight months.

Central bank officials noted US inflation continues to ease after Wednesday's data, but foresee uncertainty due to anticipated Trump administration policies.

Investors are worried that the potential for tariffs after Donald Trump re-enters the White House next week could stoke inflation and limit the Fed's ability to lower rates to a greater extent.

Non-yielding bullion, a hedge against inflation, loses its appeal with higher interest rates.

Elsewhere, spot silver rose 0.7% to $30.87 per ounce and platinum firmed 0.6% to $944.23, while palladium fell 0.8% to $953.49.