United States oil majors – Chevron Corp. and Exxon Mobil Corp. have cut spending aggressively in the third quarter, in a race to offset weak trends in fuel demand caused by the COVID-19 pandemic.
According to Reuters, Exxon posted its third straight quarter of losses on Friday and reduced spending plans for the coming year.
In common with others in the sector, the two are laying off a substantial portion of their workforce and expect to cut costs further as they try to reverse years of weak stock performance, worsened by the impact of movement restrictions.
US oil prices have dropped 41 per cent this year as the coronavirus forced billions of people into lockdowns. Demand recovered in the late northern hemisphere summer, but nations including Germany, India and the United States are again tackling a surge in infections, dampening demand for gasoline, diesel and jet fuel.
The outlook for energy consumption “depends on when the world – this country and other countries – get control of the pandemic and those activities resume. We don’t know when that’s going to be,” said Chevron Chief Financial Officer, Pierre Breber.
Exxon shares were down one per cent to $32.62 on Friday. Chevron shares gained one per cent to $69.50. Exxon shares have lost half of their value this year; Chevron’s are down 40 per cent.
Chevron, the second-largest U.S. oil producer by production, earned $201 million in the most recent quarter, compared with a profit of $2.9 billion for the year-earlier period. Exxon posted a loss of $680 million, its third straight quarterly loss.
