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| ExxonMobil and Chevron profits slide on low oil prices | |
| (35 minutes later) | |
| ExxonMobil reported a 63% slide in first quarter profits following low crude oil prices and weak refining margins. | ExxonMobil reported a 63% slide in first quarter profits following low crude oil prices and weak refining margins. |
| It reported a profit of $1.8bn (£1.24bn), a sharp decline from $4.94bn for the same period last year and its lowest quarterly profit since 1999. | It reported a profit of $1.8bn (£1.24bn), a sharp decline from $4.94bn for the same period last year and its lowest quarterly profit since 1999. |
| Revenue dropped 28% to $48.7bn, but it had strong results from its petrochemicals division. | Revenue dropped 28% to $48.7bn, but it had strong results from its petrochemicals division. |
| Rival Chevron faired even worse, with a quarterly net loss of $725m. | Rival Chevron faired even worse, with a quarterly net loss of $725m. |
| That compared with a net profit of $2.57bn for the same period in 2015 and was worse than analysts had expected. | |
| John Watson, Chevron chief executive, said: "We are controlling our spend and getting key projects under construction online, which will boost revenue." | |
| Shares in ExxonMobil rose 1.4% in New York on Friday, while Chevron fell 0.6%. | |
| Meanwhile, oil prices hit their highest levels of the year on Friday, driven up by lower US production and a weak dollar. | |
| Brent crude was up 12 cents at $48.26 a barrel in afternoon trading, while US oil rose 57 cents to $46.60. | |
| US oil production has continued to fall in recent months, easing concerns about oversupply, while the dollar has lost almost 2% of its value against other global currencies in the past week. | US oil production has continued to fall in recent months, easing concerns about oversupply, while the dollar has lost almost 2% of its value against other global currencies in the past week. |
| A weaker US dollar typically contributes to a rise in oil prices, because oil is priced in dollars. When the dollar weakens against other currencies, oil becomes cheaper to buy, pushing up demand. | A weaker US dollar typically contributes to a rise in oil prices, because oil is priced in dollars. When the dollar weakens against other currencies, oil becomes cheaper to buy, pushing up demand. |
| Production rise | Production rise |
| However, the latest rise in oil prices may be limited by a future increase in Middle East production, according to a note released by Deutsche Bank. | However, the latest rise in oil prices may be limited by a future increase in Middle East production, according to a note released by Deutsche Bank. |
| Iraq and the UAE are likely to raise production after maintenance issues are resolved, Deutsche indicated, and Saudi Arabia may also increase production significantly. | Iraq and the UAE are likely to raise production after maintenance issues are resolved, Deutsche indicated, and Saudi Arabia may also increase production significantly. |
| "A sustainable rise in Opec production may be just around the corner, and... the rally may pause," Deutsche analysts said. | "A sustainable rise in Opec production may be just around the corner, and... the rally may pause," Deutsche analysts said. |
| But this may be tempered by events in Latin America, where Venezuela is struggling to maintain its crude output, according to a report from Eurasia Group. | |
| The organisation reported that low oil prices over the past two years have meant Venezuela's government is running out of cash to keep its state-owned oil pumps operational. | The organisation reported that low oil prices over the past two years have meant Venezuela's government is running out of cash to keep its state-owned oil pumps operational. |
| Hamza Khan, senior commodity strategist at ING, said: "The issue is that we haven't seen price rallies ... correlate with fundamentals. The fundamentals - high stocks, high production - haven't changed." | |
| Price dynamics | Price dynamics |
| The oil price has fallen dramatically over the past two years since Brent crude hit a peak of $115 a barrel in June 2014. | The oil price has fallen dramatically over the past two years since Brent crude hit a peak of $115 a barrel in June 2014. |
| One factor behind the fall has been slowing demand from China and other developing economies. | One factor behind the fall has been slowing demand from China and other developing economies. |
| Supplies have also increased, most notably from new sources of US shale oil. | Supplies have also increased, most notably from new sources of US shale oil. |
| In addition, big producers such as Saudi Arabia have not reduced output to try to push up prices. | In addition, big producers such as Saudi Arabia have not reduced output to try to push up prices. |
| Earlier this month, a meeting of the world's leading oil exporters failed to agree a cap on production. | Earlier this month, a meeting of the world's leading oil exporters failed to agree a cap on production. |
| Saudi Arabia appeared willing to freeze output only if all members of the Opec oil producers' cartel agreed, including Iran. | Saudi Arabia appeared willing to freeze output only if all members of the Opec oil producers' cartel agreed, including Iran. |
| But Iran maintained it would continue the increase in oil production it has followed since economic sanctions were lifted earlier this year. | But Iran maintained it would continue the increase in oil production it has followed since economic sanctions were lifted earlier this year. |