Exxon expects another loss from production business as oil downturn drags on

Exxon Mobil Corp XOM.N expects to post a quarterly loss from its production business for the third consecutive time this year, the largest U.S. oil major said in a filing on Thursday, as it continues to suffer from a crash in commodity prices due to the coronavirus pandemic.

Exxon reported its first back-to-back quarterly loss in at least 36 years in July and vowed to make deep spending cuts to cope with sharply lower energy demand and prices.

Analysts at Tudor, Pickering, Holt & Co said the items highlighted in Exxon’s pre-results filing point to Exxon posting a loss closer to $0.30 per share, much higher than the 7 cents per share estimated by Refinitiv IBES. The company is due to report third-quarter results on Oct. 30.

Higher crude prices will help Exxon’s exploration and production earnings by $1.4 billion to $1.8 billion, compared with the second quarter, the company said. However, weak gas prices will continue to weigh on the segment and could hurt earnings by as much as $500 million.

Lower demand for fuels would hurt refining margins by $200 million to $600 million, the company said, adding that logistics differentials could also hurt the refining division by as much as $200 million. (bit.ly/3l2CWP1)

Its chemicals sector earnings is expected to get a $200 million boost from higher sales volumes, the company said in its investor snapshot of operations.
Source: Reuters (Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva and Maju Samuel)