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Exxon hits record high.

 The US oil group’s earn­ings have high­lighted the wind­fall for Big Oil from Rus­sia’s war in Ukraine des­pite a fourth-

Exxon Mobil

quarter slow­ing of prices. Even though the fourth quarter was among the com­pany’s most prof­it­able ever recor­ded, it was down sharply from the record-break­ing $19.7bn earned in the third quarter, a sign that Big Oil’s earn­ings surge has decel­er­ated in recent months as oil and gas prices have fallen from near-record levels last sum­mer. Yet Dar­ren Woods, Exxon chief exec­ut­ive, warned that global oil and gas sup­plies were likely to remain tight because industry out­put is not «cov­er­ing the growth» of resur­gent demand. Sup­plies would be con­strained in part because «some of our com­pet­it­ors have stepped back their invest­ment », he said without identi­fy­ing the com­pet­it­ors.


Some Exxon peers such as BP, Shell and TotalEn­er­gies have said they plan to pull back their fossil fuel invest­ments in response to con­cerns over cli­mate change. Woods said Exxon «benefited from a favour­able mar­ket» but had also «bucked con­ven­tional wis­dom» by con­tinu­ing to invest dur­ing the pan­demic, which helped deliver «industry-lead­ing oper­at­ing and fin­an­cial res­ults and share­holder returns in 2022». Chev­ron, Exxon’s lead­ing US rival, repor­ted its own record earn­ings for 2022 of $35.5bn on Fri­day, put­ting the Amer­ican oil titans’ com­bined earn­ings for last year at an all-time high of more than $91bn, eclipsing the pre­vi­ous peak of $71bn in 2012. Oil prices have ral­lied in the past month over investor expect­a­tions that China’s eco­nomic reopen­ing will accel­er­ate crude demand growth while sanc­tions on Rus­sia weigh on global sup­plies.

Brent crude was trad­ing at $84.54 a bar­rel yes­ter­day after­noon, hav­ing fallen to about $75 in Decem­ber. In the US, Exxon­Mobil and Chev­ron col­lect­ively made more than $91bn in net income. Profit growth was already start­ing to decel­er­ate in the fourth quarter. Earn­ings are expec­ted to fall this year and next.

Exxon stock hit a new high last week after climb­ing some 160 per cent over two years. Chev­ron is also trad­ing near the record highs set in Novem­ber. Exxon has a con­trarian reason for stick­ing with its oil and gas busi­ness. It believes the world will con­sume more crude in 2050 than today.

That stands in con­trast to BP, which is pro­ject­ing a 25 per cent drop in demand by 2050. Des­pite the big run up in share prices, the energy sec­tor still accounts for just 5 per cent of the S&P 500. A dec­ade ago, it was more than 11 per cent.
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