NorthAmOil: Oil prices boost second-quarter performances

Oil and gas companies across North America are reporting improved performances for the second quarter of 2021 thanks to stronger crude and natural gas prices. The results are also markedly better on a year-on-year basis given that the second quarter of 2020 saw the peak of the first global wave of the coronavirus (COVID-19) as much of the world went into lockdown and US oil prices briefly turned negative.
While considerable uncertainty related to the pandemic remains, the second quarter of 2021 has been characterised by more stable oil and gas prices and rebounding demand as industrial activity and travel has returned.
This trend is visible across both the US and Canada, with leading oil sands producers, super-majors and shale drillers alike reporting second-quarter profits.
In the US, super-majors Chevron and ExxonMobil both reported profits for the second straight quarter, exceeding analyst expectations. Chevron reported its highest free cash flow (FCF) in two years, which it attributed to a strong operational and financial performance, as well as lower capital expenditure. The company said that it was reinstating its share repurchase programme, which is being seen as a sign of confidence in its future earnings.
Also in the US, a handful of leading shale producers including Pioneer Natural Resources and Diamondback Energy have reported strong profits for the second quarter.
In Canada, meanwhile, Suncor Energy and Cenovus Energy both announced better-than-expected profits for the second quarter. However, Imperial Oil, a subsidiary of ExxonMobil, reported a 7% fall in second-quarter profit on planned turnaround activity and weaker margins in its downstream business.