US oil giants return to profitability in Q1 on oil prices

US oil giants return to profitability in Q1 on oil prices

NEW YORK: After a string of losses, ExxonMobil and Chevron on Friday both reported a return to profitability in the first quarter, bolstered by a significant jump in oil prices. The results, which come amid a similar round of profits by Royal Dutch Shell, Total and other European petroleum giants, point to a much-improved demand outlook compared with last year, when oil prices tumbled midway through the first quarter as the coronavirus crisis shuttered large parts of the economy. “Earnings strengthened primarily due to higher oil prices as the economy recovers,” said Chevron Chief Executive Mike Wirth.

Yet larger petroleum companies still face major challenges, including campaigns from activist shareholders at annual meetings next month over their response to climate change. Both US oil firms also face weakness in their downstream business amid tepid demand for petroleum products, especially jet fuel. ExxonMobil, which reported losses in all four quarters in 2020, reported profits of $2.7 billion in the first quarter. Revenues rose 5.3 percent to $59.1 billion.

The company said its average price for crude oil sold rose 42 percent compared with the fourth quarter, while natural gas prices rose by 33 percent. Conditions in the downstream business improved from the fourth