Business

Higher natural gas prices to drive Exxon third-quarter earnings

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A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018. REUTERS/Sergio Moraes/File Photo/File Photo

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HOUSTON, Sept 30 (Reuters) - Exxon Mobil Corp (XOM.N) signaled on Thursday that higher oil and gas prices would boost third-quarter earnings by as much as $1.5 billion over the second quarter.

Natural gas prices in the United States have more than doubled this year and oil prices are up 52% as energy demand recovers from the COVID-19 pandemic.

Exxon also has been cutting costs and laying off personnel following a historic loss in 2020. Lower costs coupled with the recent rebound in oil and gas have driven profit sharply higher.

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Natural gas prices should give the U.S. oil producer the largest increase in operating profit in the quarter, the company signaled in a corporate filing. Profit from natural could rise between $500 million-900 million this quarter over last, it said.

U.S. natural gas prices were trading at almost $6 per million British Thermal units on Thursday.

Healthier refining margins could add from $500 million to $700 million in operating profits this quarter. Exxon quarter results will be posted on Oct. 29.

Chemical margins, on the other hand, could cut operating profit by between $200 million and $400 million in the quarter, the company said in the filing.

It also said unsettled derivatives could reduce operating profit from oil and gas production by between $100 million-500 million in the period.

Last year, the company suffered a $680 million loss in the third quarter on lower oil prices and production volumes.

Exxon shares closed on Thursday at $58.82, up 43% this year.

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Reporting by Sabrina Valle in Houston and Uday Sampath in Bengaluru; Editing by Shounak Dasgupta and Matthew Lewis

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