Exxon shares gain profits to benefit from rally in natural gas and oil

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Exxon

Mobil said rising oil and gas prices could boost third-quarter profits to $ 1.5 billion, in a document filed Thursday night.

Natural gas prices have jumped around the world in recent months as shortages hit the UK, Europe and China, in part caused by increased demand from the upturn in Covid-19.

U.S. natural gas prices have climbed more than 130% so far this year, hitting seven-year highs on Thursday. Oil prices have also risen, as West Texas Intermediate futures have risen more than 50% since the start of the year.

Exxon (ticker: XOM) said it expected changes in natural gas prices to increase third-quarter profits by $ 500 million to $ 900 million from the previous quarter, while higher prices of gasoline oil could increase profits by $ 200 to $ 600 million.

Refining margins are also expected to improve, adding $ 500 million to $ 700 million to profits, Exxon said, but chemical margins could negatively impact third-quarter results by $ 200 million to $ 400 million. Despite the expected boost, Exxon stock was largely unchanged in pre-market trading on Friday morning, advancing 0.4% after slipping 1.7% on Thursday. Stocks have climbed more than 9% in the past month, as energy stocks enjoyed a gain amid the global electricity crisis.

The crisis shows no sign of abating so far. European natural gas reached € 100 per megawatt hour on Thursday evening, before declining on Friday. That’s a five-fold increase this year. The latest upward move came when a senior Chinese government official ordered state-owned companies to secure energy supplies at all costs.

The pressure eased slightly when Russia said exports by state-owned Gazprom to its main Asian and European markets would increase by more than 10% from last year, beating previous forecasts.

Write to Callum Keown at [email protected]