Losses mount for oil majors as pandemic grips global economy

NEW YORK (AP) — Exxon Mobil reported its third consecutive quarter of losses as the global pandemic curtails travel and cripples global economic activity.

The energy giant on Friday posted a $680 million third-quarter loss and revenue tumbled to $46.2 billion, down from $65.05 billion during the same quarter last year.

The string of losses and what could be a money-losing year is new territory for Exxon Mobil.

“This is a business that’s made a billion dollars a quarter on average from 2011 to 2018 and it’s had a rough go,” said Peter McNally, global sector lead for industrials, materials and energy at Third Bridge, a research firm.

Already struggling with weak prices from oversupply, the pandemic is taking a heavy toll on oil and gas companies. The price of U.S. benchmark crude has fallen 40% since the start of the year. The cost for a barrel of oil tumbled 10% just this week as coronavirus infections surged in the U.S. and abroad.

"We remain confident in our long-term strategy and the fundamentals of our business, and are taking the necessary actions to preserve value while protecting the balance sheet and dividend,” said Darren Woods, CEO in a prepared statement. “We are on pace to achieve our 2020 cost-reduction targets and are progressing additional savings next year as we manage through this unprecedented down cycle.”

The The Irving, Texas, company produced 3.7 million barrels of oil per day in the third quarter, up 1% from the second quarter. But production was down compared to the third quarter of 2019, when Exxon pumped 3.9 million barrels of oil per day.

Also on Friday, Chevron reported losses of $207 million after turning in a profit of $2.9 billion last year. It brought in $24 billion in revenues, down from $35 billion during the same period last year.

“It’s not going well,” McNally said. “You have to squint at some of the things to find things that are good.”

And the third quarter was an improvement compared with the last, when oil futures crashed below zero. Exxon and Chevron lost a combined $9 billion.

Oil prices appeared to stabilize this quarter, however, and better conditions enabled Exxon to recover some of its production curtailments, the company said.

Demand for refined products also improved, and chemical sales volumes rose as demand for packaging increased and automotive and construction markets recovered, Exxon said.

On Thursday Exxon announced 1,900 job cuts in its U.S. workforce and Chevron, after closing on its acquisition of Noble Energy earlier this month, said it would cut a quarter of that company's jobs.

Oil demand is expected to fall 8% globally this year, according to the International Energy Agency. While some demand has recovered since oil fell below $0 a barrel in April, countries are again locking down as the coronavirus surges anew across Europe and the U.S.