Cheaper oil is leading to the lowest summer gasoline prices in years, and it is causing heartburn for oil companies and their shareholders.
On Friday, Exxon Mobil Corp. reported its smallest quarterly profit in nearly 17 years – although it still earned $1.7 billion. Chevron Corp. posted its biggest loss in nearly 15 years.
The reports from the two biggest U.S. oil companies followed weak second-quarter results from BP and Royal Dutch Shell.
Exxon Chairman and CEO Rex Tillerson said the results “reflect a volatile industry environment.”
Never miss a local story.
The companies have slashed spending on exploration and cut budgets to offset lower prices, but that has yet to create a sustained rebound in oil prices.
U.S. crude rallied from below $30 a barrel in February to above $50 in early June. But more recently oil prices have faded again, with crude inventories remaining stubbornly high and the global economy mired in a funk. This week, U.S. oil hit a three-month low.
Production of oil in U.S. shale fields has fallen, and wildfires in Canada and unrest in Nigeria have also interrupted oil flows at times this year. Still, major players like Saudi Arabia continue to pump away.
The outlook is good for drivers, bad for anyone working in, or investing in, the energy sector. The U.S. Energy Information Administration forecasts that oil will average $43.57 this year and $52.15 next year.