Signs point to better results for the oil giants this year. Crude prices are up by roughly half in the past three months,including a gain of more than 10 per cent since January 1,as major producers led by Saudi Arabia have cut output.
The oil companies are hoping that the rollout of COVID-19 vaccines will mean a return to more normal life for businesses and consumers,which would in turn boost demand for oil and natural gas.
Energy demand slumped last year as the pandemic led to lockdowns and a dramatic drop in energy for uses such as transportation.
“Energy consumption collapsed as economies shut down,oil prices hit their lowest point in history,and refining margins fell well below their 10-year lows,” said Exxon CEO Darren Woods. “It was the first time in memory that we saw simultaneous lows in each of our businesses.”
Irving,Texas-based Exxon is responding by cutting costs. It expects by 2023 to cut $US6 billion in annual spending compared with 2019 levels.
Exxon’s big fourth-quarter loss contrasted with a profit of $US5.7 billion a year earlier. Excluding the massive write-downs and other impairment costs,the company said it earned 3 US cents per share. Analysts on average expected a penny per share profit,according to a survey by Zacks Investment Research.