Sunday 25 August 2019

Exxon hit by worst refining loss in 17 years

Exxon is least-loved of supermajor oil stocks Photo: Jessica Rinaldi/Reuters
Exxon is least-loved of supermajor oil stocks Photo: Jessica Rinaldi/Reuters

Kevin Crowley and Joe Carroll

Exxon Mobil's refining business posted its poorest performance in 17 years, eroding first-quarter profit and casting doubt on the strength of the oil titan's comeback from its annus horribilis in 2018.

The company's fuel-making plants lost $256m (€229m) during the January-to-March period - an average of almost $3m a day - as hefty stockpiles of petrol squeezed margins and extensive repairs and mechanical overhauls slowed output. Exxon's chemicals business also disappointed investors with a 49pc slump in profit.

Exxon appeared to be "turning a corner," RBC Capital Markets analyst Biraj Borkhataria said in a note titled 'A downstream shocker'. "Clearly, the corner is further away than we expected and we expect this to lead to underperformance in the near term." The shares slumped as much as 3.4pc.

The weak showing in Exxon's refining and chemicals units overshadowed booming crude output from wells in the Permian Basin of West Texas and New Mexico. Daily, worldwide production increased 2.4pc to the equivalent of 3.98 million barrels from a year earlier, aided by an almost 140pc surge in Permian output. Per-share earnings were 55 cents, compared with an estimate of 72 cents.

The last time Exxon's refineries lost money was 2009 and the first-quarter showing was the worst in data going back to 2001.

Prior to the announcement, Wall Street expectations for Exxon had been brightening as it attempted to rebound from a disastrous first half of 2018, during which oil and gas production reached the lowest in a decade.


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