* Exxon, Shell report Q2 results on Thursday
* BP reports on Tuesday, Chevron on Friday
* Earnings set to rise 42 pct -- Barclays
By Anna Driver
HOUSTON, July 22 The world's largest oil
companies, including Exxon Mobil Corp (XOM.N) and Royal Dutch
Shell Plc (RDSa.L), are expected to report out-sized quarterly
profits, but investors are likely to respond with a yawn,
focusing instead on the companies' ability to raise output.
Analysts at Barclays Capital expect profits at the oil
companies and refiners it follows will increase 42 percent in
the second quarter, fueled by a jump in crude prices and global
"I think they are all going to post good numbers," said
Mike Fox, an analyst at Washington, D.C.-based investment firm
Farr, Miller & Washington. "But while the numbers are going to
be good, I don't think they will move the stocks."
Investors are already looking past last quarter to the
current quarter and seeing crude prices, while still quite
high, ease a bit, Fox said.
European benchmark Brent oil LCOc1 is currently trading
around $117 per barrel, flat with its average in the second
quarter. That price is up from $79 in the same quarter in
For a graphic charting stock performance click:
The gains in oil are expected to help push up Exxon's
second-quarter income by 49 percent to $11.3 billion, according
to data from Thomson Reuters I/B/E/S.
BP Plc (BP.L)(BP.N) is forecast to report a 21 percent rise
in replacement cost net income, excluding one-time items, to
$6.02 billion, according to a Reuters poll of 12 analysts.
Shell, Europe's largest oil and gas company by market
value, is expected to report a 59 percent rise in current cost
of supply net income, excluding one-time items, to $6.70
Global refining margins rose in the quarter, driven
primarily by demand for fuel such as diesel in developing
countries. Gasoline prices in the United States were supported
by relatively low inventories, analysts said.
Large oil companies have found it difficult to increase
production. Investment in massive, long-term exploration
projects is required and access to resources is tougher, with
many producing nations restricting oil majors' access.
"We expect challenged production to once again present
itself as a key theme in this earnings season," analysts at
Houston energy investment bank Simmons & Co International said
in a note to clients.
In the second quarter, Simmons projects production will
decline 3 percent for integrated oil companies, due in part to
flooding in North America, continued unrest in the Middle East
and North Africa and the effect of higher prices on production
Analysts at Deutsche Bank see European oil company earnings
rising 28 percent in the quarter, but expect oil and gas output
to decline an aggregate 7 percent.
"Evidence of a challenging (second quarter) will do little
to aid sentiment toward Big Oil," analysts at Deutsche Bank
said in a research note.
BP's sale of oil fields to pay for its Gulf of Mexico oil
spill disaster has eaten into production and profits, with
output seen down 11 percent in the quarter.
Shell's output is seen down 1 percent as the start-up of
new projects failed to match the impact of a warmer-than-usual
second quarter in Europe, which hit demand for natural gas.
Chevron Corp (CVX.N) said on July 11 its second-quarter
profit would be higher than the previous quarter, while its
output fell in the first two months of the period.
Analysts see Exxon bucking the downward trend, mostly due
to output gained from its purchase last year of XTO Energy Inc,
a U.S.-based natural gas company, for more than $30 billion in
Simmons expects Exxon's production to rise 12 percent,
lifted by big natural gas production from the XTO acquisition.
Other factors that may show up in earnings or production at
the biggest oil companies include spring flooding in the United
States, continued unrest in the Middle East and North Africa
and higher British taxes on North Sea oil and gas producers,
(Additional reporting by Tom Bergin in London; editing by