Global energy giant Exxon Mobil has hinted at a significant decline in its third-quarter upstream earnings, likely due to the sharp drop in oil prices during the period. According to a recent regulatory filing, the company’s profits may have taken a $600 million to $1 billion hit as a result of the 17% quarterly slide in oil prices, the steepest decline in a year.
The downward pressure on oil prices was largely driven by concerns over weakening global demand, particularly in China, where slowing economic growth and the rising popularity of electric vehicles have dampened consumption. As a result, Brent crude futures settled at $71.77 per barrel on the last trading day of the quarter.
Exxon Mobil also cautioned that refining margins would be weaker during the quarter, which could further erode profits by up to $1 billion. This is largely due to softer consumer and industrial demand for fuels, which has been a persistent trend in recent months.
The company’s shares closed at $122.58 on Thursday, with minimal movement in after-hours trading. In the second quarter, Exxon Mobil reported upstream earnings of $7.07 billion, while its net profit for the same period last year stood at $9.1 billion, or $2.25 per share. Analysts are expecting the energy major to post an adjusted profit of $1.97 per share for the third quarter.
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