Higher natural gas prices to drive Exxon third-quarter earnings

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FILE PHOTO: Logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro

By Sabrina Valle

HOUSTON (Reuters) -Exxon Mobil Corp 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.

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.

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

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