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Exxon Mobil Corp.

Oil Giants Exxon and Chevron Boost Production Amid Uncertain Market Conditions

Strategic Insights

— 2 min read

Amidst geopolitical tensions, fluctuating oil prices, and uncertainty over global trade and the US economy, two of the largest US oil companies, ExxonMobil and Chevron, have increased their production in the third quarter, chalking up lower but still robust profits. Despite the fragile cease-fire in Gaza and new US sanctions on Russian energy, oil prices have hovered around $60 a barrel, leaving companies bracing for potential further declines.

Key Takeaways:

  • ExxonMobil's output rose about 4% in the third quarter compared to a year earlier, while Chevron produced around 7% more, excluding contributions from Hess, which it acquired this summer.
  • The oil cartel, OPEC Plus, is also ramping up production, with Saudi Arabia and other members set to meet on Sunday to consider adding more oil to the market.
  • Global supplies are expected to increase around 2.1% this year, while demand expands a mere 0.9%, according to UBS estimates.
  • Many executives, including SLB's chief executive, Olivier Le Peuch, believe demand will catch up relatively quickly, potentially as soon as next year.
  • Exxon's third-quarter profit fell 12% to $7.5 billion, while Chevron's profit dropped 21% to $3.5 billion due to lower oil prices and higher costs.
  • The industry has underperformed the stock market, with a related exchange-traded fund down 5% this year, despite the S&P 500 index gaining 16%.
  • Smaller oil and gas producers have been particularly hard hit, with the number of hydraulic fracturing crews in the Permian Basin falling around 25% this year.
  • Exxon and Chevron are laying off workers to maintain profit margins, with Exxon continuing to pursue opportunities to provide power for data centers that capture and utilize carbon dioxide emissions.

Statistics:

  • Global supplies will increase around 2.1% this year, while demand expands a mere 0.9%, according to UBS estimates.
  • Exxon's third-quarter profit fell 12% to $7.5 billion, with revenue decreasing 5% to $85.3 billion.
  • Chevron's profit dropped 21% to $3.5 billion, with revenue slipping 2% to $49.7 billion.
  • The industry has underperformed the stock market, with an exchange-traded fund composed of US oil and gas companies down 5% this year, despite the S&P 500 index gaining 16%.
  • The number of hydraulic fracturing crews working in the Permian Basin has fallen around 25% this year, according to ProPetro Holding.

Sources:

  • UBS estimates
  • ExxonMobil's third-quarter earnings report
  • Chevron's third-quarter earnings report
  • ProPetro Holding's data on hydraulic fracturing crews in the Permian Basin
  • The New York Times article on oil giants' production and profits
  • Olivier Le Peuch, chief executive of SLB
  • Wael Sawan, chief executive of Shell

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