Exxon says that a strong profit in the fourth quarter will help the company set a new annual record.
Exxon Mobil Corp. said that it expects to make a strong operational profit of about $15.4 billion in its fourth quarter. This will put the company on track to make a record amount of money in 2022.
In a securities filing, the largest oil producer in the US said that its huge profits from the previous quarters were slowing down. But early operational results showed that 2022 was Exxon’s best financial year, with profits of around $58 billion.
Formal income is due on January 31.
As crude prices fell, its biggest business, pumping oil and gas, brought in about $2.3 billion less than the record $12.4 billion it made in the third quarter.
During the third quarter, the gasoline and diesel businesses made a profit of about $4.9 billion. This is because fuel prices fell from their summer highs. Profits from chemicals went down to about $300 million, while profits from motor oils stayed the same at about $800 million.
When impairments are taken into account, Exxon’s operating profits were about $15.4 billion. This shows that the company’s annual results will be much higher than the record $45 billion it made in 2008, when oil prices were at their highest point of $142/barrel. In the second and third quarters of last year, the company made more money than ever before.
There could be more calls in the U.S. to tax windfalls because of these record profits. In Europe, Exxon is already fighting the bloc in court to stop it from adding more taxes, which the company says discourages investment.
Last year, all of the oil majors made record profits thanks to the high prices of oil and natural gas on the world market. Exxon made the most money after doubling down on oil during the pandemic, while its European competitors switched to projects that used renewable energy. Its stock rose by 80% in 2022, putting it ahead of competitors.
In the last quarter of the year, the sky-high oil prices that had driven gains for most of the year began to fall. Brent futures for 2022 ended at $77.17 per barrel. In March, they were as high as $140 per barrel.
On the other hand, gas markets around the world did very well at the end of 2022. Gas futures in the U.S. went up by more than 20%.
Exxon said it would write off about $500 million worth of assets as it gets rid of those it doesn’t need to focus on more profitable projects.