By Sheila Dang and Shariq Khan
Houston-Big Oil Executives saw little prospect this week in the short term in refinery profits after Chevron, Exxon Mobil and Shell all reported income from the fourth quarter that were hit hard by a decline in the margins for producing fuel.
An increase in global refining capacity in 2024, in combination with the growth of the sputter of the sputter, has damaged the refining margins.
The shares of Chevron fell 4% after it had reported a loss in his refining company for the first time since 2020, so that the profit estimate of the American oil producer has missed the profit profit of Wall Street.
“This trend that we have seen from margins that are softened by 2024 is something that you can expect to continue to see, to expand until 2025,” said Chevron CEO Mike Wirth in an interview.
“It was a weak fourth quarter, there is no doubt about it,” he said during a conference Call after keeping it out in response to a question from an analyst about the refining-neergang.
“I’m not going to call it a perfect storm, but it was a quarter in which everything went on one side and it was negative.”
Wirth said that Chevron would concentrate on what it can arrange to bounce back, including lighter planned maintenance for refineries in the following year.
The shares of Exxon Mobil fell by 2.5% after it reported a decrease of 75% in adjusted revenue from refining compared to the third quarter. The wider S&P 500 Energy Sector Index fell by 2.8%on Friday.
The refining company remains under pressure from extra fuel supply that comes on the market after new refineries in various countries have been opened around the world, said Exxon’s Chief Financial Officer Kathryn Mikells in an interview.
“That’s really what we look while we look ahead to 2025,” she said.
The number 1 American oil producer still beats profit estimates with higher production of the Perm, the best US Oilfield and Guyana, the latest oil hotspot.
Shell, based in the UK, said on Thursday that although it had no plans to leave the refining company, it was also not going to expand.
The profit of the fourth quarter of the company has almost halved from the previous year to $ 3.66 billion, partly due to weaker refining margins.
Shell sold its refining and chemical hub in Singapore last year and is planning to close another factory in Wesseling, Germany.
Save to independent refineries
While higher oil and gas production helped with the oil majors of the impact of lower refining profits, the pure-play refineries took a hit when the fuel demand in the US and China faltered, the two largest oil consumers.
The profit of the fourth quarter of Phillips 66 fell to $ 8 million from $ 1.26 billion in the quarter of a year ago. Valero’s refining -win fell by 73% in the fourth quarter.