Exxon Mobil Corp. and Chevron Corp., the biggest US energy producers, hunkered down for a prolonged stretch of weak prices after posting their worst quarterly performances in several years.
Exxon reported its lowest profit since 2009 as crude prices fell twice as fast as the world’s largest crude producer by market value could slash expenses. Chevron recorded its lowest profit in more than 12 years after the market rout forced $2.6 billion in asset writedowns and related charges.
The companies’ shares fell to multi-year lows, Bloomberg reported.
Stung by the worst market collapse since the financial crisis of 2008, oil explorers from The Hague to Calgary to Houston are firing staff, scaling back drilling, canceling rig contracts and reducing share buybacks to conserve cash. Chevron said the slump convinced it to lower its long-term outlook for crude prices.
“This is the beginning, not the end, of the writedown process,” Paul Sankey, an energy analyst at Wolfe Research LLC. “The biggest concern is that we’ll see weaker demand over the second half of the year.”
Oil entered its second bear market since mid-2014 this month as a flood of output from North American shale regions, the Persian Gulf and deepwater fields overwhelmed consumption by refiners and chemical producers.
