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Exxon signals strong Q4 profit to drive annual record

Published 05/01/2023, 11:09 am
Updated 05/01/2023, 01:31 pm
© Reuters. FILE PHOTO: Cars are seen at an Exxon gas station in Brooklyn, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly/File Photo

By Sabrina Valle

(Reuters) - Exxon Mobil Corp (NYSE:XOM) on Wednesday signaled another strong operational profit of about $15.4 billion in its fourth quarter, pushing it toward a record take for all of 2022.

The largest U.S. oil producer indicated in a securities filing a cooling from its massive profits from the prior quarters. But preliminary operational results confirmed 2022 was Exxon's best financial year with profits of around $58 billion.

Formal earnings are due on Jan. 31.

Operational results from pumping oil and gas, its largest business, retreated about $2.3 billion from the record $12.4 billion in the third quarter as crude prices fell.

The gasoline and diesel business delivered about $4.9 billion of profit in the quarter as fuel prices also eased from summer highs. Chemical profits decreased to about $300 million, while motor oils profits were unchanged at about $800 million.

Graphic 1: Exxon signals record annual profits in 2022,https://www.reuters.com/graphics/EXXON-OUTLOOK/akveqqbnqvr/chart.png

The about $15.4 billion in operating profits excluding impairments indicates annual results will far exceed the record $45 billion Exxon posted in 2008, when oil prices peaked at $142 per barrel. The company posted back-to-back record profits in the second and third quarters last year.

These record profits might lead to fresh calls to levy windfall taxes in the U.S. In Europe, Exxon is already legally battling the bloc against further taxes that the company says discourages investments.

High international oil and natural gas prices last year generated record earnings among all oil majors. Exxon benefited the most after doubling down on oil during the pandemic as European rivals shifted to renewable energy projects. Its shares jumped 80% in 2022, outrunning rivals.

Sky-high oil prices that fueled gains for most of the year eased in the final quarter. Brent futures closed 2022 at $77.17 a barrel, after hitting nearly $140 a barrel in March.

© Reuters. FILE PHOTO: Cars are seen at an Exxon gas station in Brooklyn, New York City, U.S., November 23, 2021. REUTERS/Andrew Kelly/File Photo

Global gas markets, on the other hand, ended 2022 with strong gains. U.S. gas futures jumped by more than 20%.

Exxon signaled impairments of about $500 million as it dumps unwanted assets to focus on more profitable projects.

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