PREVIEW-Oil majors to post bumper quarter amid crude crash
* Top oil companies report with oil prices half their peak
* Strong Q3 earnings may not lure back investors
* Spending outlook will be key
SAN FRANCISCO, Oct 19 (Reuters) - Reporting earnings for a quarter in which crude prices hit a record high once looked to be a lot easier for the world's top oil companies than it actually will be in the next few weeks.
The start of the third quarter in July, the month when U.S. crude oil CLc1 topped out at $147, must seem a very long time ago for all energy producers now that a barrel goes for half that price.
So while they roll out more fat profits, some even setting new records, big oil companies will also face tough questions about what they plan to do with all the accumulated cash and how their outlook has changed now that crude and natural gas are trading near their lowest levels in more than a year.
"The earnings should be good because prices were high during the quarter, but whether that pulls investors into the stocks, I really don't know," said Mark Coffelt, head portfolio manager at Empiric Advisors Inc in Austin, Texas.
"Right now we have a market of events, as opposed to a market of fundamentals."
The Chicago Board Options Exchange's index of oil companies .OIX has fallen 37 percent since the start of 2008, whereas U.S. crude oil is about 25 percent lower.
Coffelt said he would wait until oil prices stabilize before adding to his energy portfolio, which includes Exxon Mobil Corp (XOM.N) and ConocoPhillips (COP.N) -- the latter kicking things off for the sector, reporting on Wednesday.
Exxon, the largest non-government-controlled oil company, is expected to report a 32 percent rise in profit to $12.44 billion, based on Reuters Estimates, which would top the second quarter when its profit was a record for any U.S. company.
Analysts at Morgan Stanley said the market would likely look past the third-quarter profits of nearest rival Royal Dutch Shell Plc (RDSa.L) and BP Plc (BP.L) to what the two British oil majors planned to do with their money.
Investors would look for indications from executives of continued strong cash flows, as well as cues on any plans for mergers and acquisitions, Morgan Stanley said.
Jason Kenney at ING said he expected strong performances from Shell as well as BG Group Plc (BG.L), a British gas producer.
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