Early Signs Of A Pullback In Drilling Activity.
With oil prices low and showing no sign of an immediate rebound, the industry is beginning to pull back on spending.
Oil prices have dropped around 30 percent since summer highs, raising fears among producers across the globe. Yet, many oil majors are relatively diversified, with large holdings downstream. For example, ExxonMobil and Chevron have been insulated in the third quarter because of their large holdings in refining. Steep declines in oil prices may hurt their production sectors, but with lower priced oil as an input, big oil’s refining assets become more profitable.
For the third quarter, ExxonMobil reported a 3 percent rise in earnings compared to quarter three in 2013. That was largely driven by the Texas-based oil giant’s refining assets, which saw its profits rise by more than 70 percent from $592 million to $1.02 billion. Chevron’s refining program succeeded in quadrupling its profits in the third quarter, more than offsetting the hit the company has taken from the slide in oil prices.
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