The second-quarter figures of the two largest petroleum companies in the US, ExxonMobil (US:XOM) and Chevron (US:CVX), were released last week, showcasing their strong performance despite severe shipping disruptions in the Strait of Hormuz. The price of Brent crude, trading above $100 a barrel for most of the period, has averaged just over $87 for the year. Diesel costs have also risen rapidly, impacting farm costs and logistics and leading to concerns about inflation.<\/p>\n
Both ExxonMobil and Chevron have managed to weather the challenges, with Chevron benefiting from the majority of its production being outside the Middle East. ExxonMobil, although having a fifth of its output tied to the Gulf states, has not been significantly affected. The International Energy Agency estimates that about 3 million barrels a day of refining capacity in the region have been lost, leading to tight supplies of finished products, particularly diesel.<\/p>\n
US drillers have seen a steep rise in refining margins, with Exxon experiencing a significant increase in profits during Q2. Chevron achieved record crude throughput at US refineries and a sixfold increase in refining profit compared to the prior year. Despite Exxon falling slightly short of consensus on adjusted earnings, it delivered record production in the US Permian Basin.<\/p>\n
Chevron generated its highest ever quarterly net income, with operating cash flow also hitting a record high. The company took a prudent approach by paying down debt before distributing funds to shareholders. Unlike their European counterparts, Exxon and Chevron do not have major trading operations, but they are slowly expanding their activities in the liquefied natural gas market.<\/p>\n
Although the US majors have a more centralized business structure compared to European companies, their aversion to futures contracts and CFDs has not affected their ratings. Both Exxon and Chevron have forward price\/earnings multiples in the mid-teens, indicating investor confidence in their performance. This lower cost of capital provides a significant advantage for the US companies in the resource sector.<\/p>\n
In conclusion, ExxonMobil and Chevron have demonstrated resilience and strong performance in the face of global energy market disruptions. Their strategic positioning and financial strength have allowed them to navigate challenges effectively, setting them apart from their European counterparts. Despite their different approach to trading, the US majors continue to attract investor confidence and maintain a solid financial standing in the industry. <\/p>\n","protected":false},"excerpt":{"rendered":"
The second-quarter figures of the two largest petroleum companies in the US, ExxonMobil (US:XOM) and Chevron (US:CVX), were released last week, showcasing their strong performance despite severe shipping disruptions in the Strait of Hormuz. The price of Brent crude, trading above $100 a barrel for most of the period, has averaged just over $87 for […]<\/p>\n","protected":false},"author":1,"featured_media":1358,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[1746,597,1776,1778,41,1777],"class_list":["post-1357","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-american","tag-disruption","tag-giants","tag-gulf","tag-oil","tag-sail"],"_links":{"self":[{"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/posts\/1357"}],"collection":[{"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/comments?post=1357"}],"version-history":[{"count":0,"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/posts\/1357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/media\/1358"}],"wp:attachment":[{"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/media?parent=1357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/categories?post=1357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/chasebelgrave.com\/index.php\/wp-json\/wp\/v2\/tags?post=1357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}