NorthAmOil: ExxonMobil warns drop in profits on natgas prices

Supermajor ExxonMobil has signalled that its profits will be hit hard by weaker prices for natural gas after a record 2022, when Russia’s invasion of Ukraine sent prices soaring and boosted oil and gas earnings to records highs.

On July 5, the company said that lower gas prices will decrease its earnings by as much as $1,8bn to $2.2bn in the second quarter of 2023 in its upstream business, according to a regulatory filing.

Additionally, weaker refining margins will hit profits downstream by $2.0bn to $2.2bn.

Lower earnings in the two divisions will most likely decrease ExxonMobil’s net income to around $7.5bn, said an RBC Capital Markets analyst, Biraj Borkhataria, in a note. “The update is likely to be viewed negatively for earnings expectations into reporting, and we expect consensus numbers to move lower over the coming days,” said Borkhataria. 

That is far less than the current Bloomberg Consensus of around $9.43bn.