PREVIEW-Higher oil prices to boost companies' Q1 profits

* Oil prices almost double as economy rebounds

* Refining margins off Q4 floor

* Production growth seen anaemic

LONDON, April 22 (Reuters) - The biggest U.S. and European oil companies are expected to report big rises in first-quarter profits next week on the back of a recovery in oil prices and refining margins.

Analysts said an 83 pct rise in U.S. crude prices in the quarter, compared with the same period last year, to an average of almost $79/barrel, and a 72 pct rise in Brent to over $76/barrel, will underpin the recovery in profits.

Exxon Mobil XOM.N, the world's largest non-government controlled oil company by market value, is expected to report a 44 percent rise in net income in the quarter, compared with the same period in 2009, to $6.56 billion, according to Reuters data.

Europe's No.1, Royal Dutch Shell Plc RDSa.L, will likely see a 35 percent rise in first-quarter current cost of supply net income, excluding one-offs, to $3.99 billion, according to a Reuters poll of 9 analysts.

The world's third largest Western oil major, London-based BP Plc BP.L is predicted to unveil an 85 percent rise in first-quarter replacement cost profits to $4.78 billion.

Replacement cost and current cost of supply net income exclude unrealised gains or losses related to changes in the value of inventories, as does net income under U.S. accounting rules.

France's Total TOTF.PA and U.S.-based Chevron CVX.N and ConocoPhillips COP.N are also expected to see profits jump, with Citigroup predicting a 30 percent rise across the sector.

“The year-on-year increase largely reflects the strength of crude oil prices,” the bank said in a research note.

Some analysts are predicting that after fourth-quarter earnings which often disappointed, investors could enjoy positive surprises.

“Our thought on the oil companies is that the Wall Street estimates are too low, given the fact that oil prices during the first quarter went from $70 per barrel to a peak of $86 to $87,” said Fred Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.


Average global refining margins doubled from fourth-quarter levels, according to data from BP, removing the key drag on earnings in that period, but remain at only half year-ago levels.

Margins in Europe were supported by strikes at Total refineries in France during the quarter, which will ensure the Paris-based company enjoys one of the more modest rises in profits.

Natural gas, which accounts for 30-40 percent of output for many oil majors will also weigh on some of the companies.

While benchmark U.S. gas prices were around 8 percent higher, European gas contract prices were 20 percent below first quarter 2009 levels, investment bank Credit Suisse estimated.

Production is expected to be broadly flat across the sector, with BP predicted to show a drop of under 1 percent compared with the first three months of 2009. Shell is predicted to post a tiny rise.

“Production volumes will hardly be something to crow about (again) - we forecast aggregate volumes up 0.5 percent year-on-year,” Citigroup said.

However, Morgan Stanley said it expected the companies to report stronger profits from taking bets on energy markets in the quarter, than they enjoyed in the fourth quarter. (Additional reporting by Anna Driver in Houston and Braden Reddall in San Francisco; Editing by Jon Loades-Carter)