Chevron hit by weak petrol demand

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Chevron has posted a big fall in quarterly profits, due to petrol and diesel prices failing to keep up with a big rise in the cost of crude oil.

The second-largest oil company in the US made a net profit of $3bn (£1.9bn) between October and December, down 37% from the same period in 2008.

As a result of the lower return on selling petrol and diesel, there were losses at Chevron's refinery division.

The firm's revenues for the quarter grew 12% to $48bn.

'Dragging an anchor'

Analysts said the price of crude oil rose during the three months on the growing signs that the global economy was recovering, but that demand for petrol and diesel did not rise as strongly in the face of excess global supplies.

"It's like trying to go 40mph in a boat while dragging an anchor," said James Halloran, energy adviser at Financial America Securities in Cleveland.

Chevron's results failed to meet market expectations.

In Thursday trading, US crude oil was trading up 70 cents at $74.34 a barrel, while UK Brent crude was up 68 cents to $72.81.