ExxonMobil posts record increase in half year profits
Exxon Mobil, the world's largest oil company, has posted a 6% rise in second quarter profits.
The company earned £3.08 billion, bringing its half year profit total to a record £6.63 billion.
ExxonMobil, which is based in Texas and sells under the brand name Esso in many countries, has enjoyed increased revenue from the strength of crude oil prices.
It has also been boosted by higher natural gas prices during the second quarter.
But Lee Raymond, the company's chairman warns that the oil sector faces less positive trends.
He says:"The improvement in earnings reflected higher US natural gas realisations and refining margins, both of which were very strong early in the second quarter but declined significantly as the quarter progressed."
Mr Raymond says the decline in these key earning drivers has continued into the third quarter, along with a fall in crude oil prices.
Price hike fears from OPEC cut
Michael Glackin Business News Editor
(Mglackin@scotsman.com)
PETROL pump prices look set to rise this winter following yesterday’s decision by the Organisation of Petroleum Exporting Countries (OPEC) to slash oil production.
OPEC said it intends to cut oil output by one million barrels per day from 1 September in an attempt to lift crude oil prices back to the cartel’s US$25 per barrel target.
The decision, the third time this year OPEC has cut production, will have a knock on effect on global petrol prices at the pumps, in a move that will cause particular anger in the UK and increase pressure on the government to prevent oil companies passing the increase on to consumers.
OPEC’s action will put further pressure on large oil consuming countries who already blame high energy costs for contributing to the global economic slowdown and fear the cut could herald a renewed bout of energy price inflation at a time when they are struggling to avoid recession.
US President George W Bush expressed concern that the decision could add further to America’s economic woes and indicated that the US would use its emergency stock reserves in order to avoid price increases.
He said: "The US economy is bumping along right now and a run-up in energy prices would hurt. Surely the OPEC leaders understand that. I think they do."
He added: "It’s very important to have stability in the marketplace."
The cut comes just days after non-OPEC producer Mexico announced it was cutting its 1.65 million-barrel-per-day output by 70,000 barrels a day, and US energy secretary Spencer Abraham added that the administration would be monitoring oil prices "very closely" in the wake of the decision.
The surprise move, which followed earlier indications by OPEC that it would not take a firm decision on output levels until its next scheduled meeting in Vienna next month, sent crude futures prices soaring to their highest level in two weeks.
The 11-nation cartel, which controls 40 per cent of the world’s crude oil production, said it had taken the decision on the back of the current weakness in world oil prices.
The cut will reduce output for 10 OPEC members by four per cent to 23.2 million barrels per day, the cartel’s lowest production since April of 1999 when tight curbs sent prices spiralling to a peak of $35 a barrel. Eleventh member Iraq’s production is unaffected, as it remains subject to United Nations sanctions under its oil-for-food exchange deal in the wake of the Gulf War.
Respected US-based Fimat energy commentator John Kilduf warned OPEC’s decision could push oil prices to top $30 per barrel by the second half of the year as demand increases over the winter.
OPEC insisted that the decision was taken in the interest of market stability after the slowing world economy had eased petroleum demand and helped build petroleum stockpiles.
Producers have struggled to maintain prices this year in the face of the slowdown in oil demand that has accompanied deteriorating world economic conditions.
However, a number of oil industry observers said the cut could backfire on the cartel and lead to some non-OPEC producers, most notably Russia, gaining a larger share of the world market by producing more oil to make up the shortfall.
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