Chevron saw its quarterly earnings nearly cut in half compared to last year. Production rose slightly, and profits were dented. But lower crude prices are affecting it less than before: rob_cyran
Men work on an electric drilling operating at a Chevron site in Kersey, Colorado, U.S. October 6, 2022.profit was cut nearly in half as production rose slightly, according to a surprise early release of the oil giant’s earnings on Sunday night. That’s a direct reflection of lower prices for each barrel of crude. Look closer, though, and there are signs the industry has learned how to make itself more durable.
Margins at oil firms are tied heavily to the price of oil. In the first half of last year, it spiked to a 13-year high. Chevron’s profit jumped, too. But in the second part of the year, the price of a barrel of Brent crude, the benchmark, fell by nearly a quarter. That came at a cost. Each barrel Chevron was producing brought in about $20 of profit, some 40% less than it had in the quarter earlier.
It suggests that oil companies have found a way to steady their drills in the face of sustained lower prices. Chevron and rivals kept their spending discipline during the boom. Now, they are keeping the balance between that and pumping, too. The U.S. oil rig count is at a 16-month low according to Goldman Sachs. As long as restraint holds the upper hand, so will Chevron’s profit.
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