Exxon Mobil Braces for $1.5B Q2 Earnings Hit From Weaker Oil, Gas Prices

Exxon Mobil (XOM) stock edged lower in extended trading on Monday after the energy firm said weak oil and gas prices could lower its second-quarter earnings by $1.5 billion.

Oil prices have been pressured this year due to uncertainty over global demand, stemming from tariff concerns and worries of OPEC+ oversupply. Analysts at Goldman Sachs have projected that oil prices will average below $60 per barrel during the fourth quarter and could dip even further due to tepid demand.

Late last week, OPEC+ raised August production levels to a higher-than-expected 548,000 barrels per day, piling further pressure on oil prices, which have lost the gains seen during the conflict between Israel and Iran.

Exxon said on Monday that lower liquids prices could reduce its upstream earnings by between $800 million and $1.2 billion compared to the first quarter, while lower gas prices could lower its income by between $300 million and $700 million. Exxon’s dour outlook followed another peer, Shell, which had weak projections for second-quarter profit due to lower trading earnings.

Analysts use Exxon’s profit outlooks as a barometer to gauge the earnings of smaller peers. The company is scheduled to report its results on Aug. 1. Retail sentiment on Stocktwits about Exxon was in the ‘bearish’ (29/100) territory on Monday.

However, the company said that higher refining margins could boost its earnings by $300 million. During the first quarter, Exxon reported total earnings of $7.7 billion.

The company had earlier reiterated its annual capital spending forecast of between $27 billion and $29 billion, despite concerns about oversupply. Investors will be keen to know whether the company will alter its plans amid the rise in supply from OPEC+.

Separately, Exxon remains locked in an arbitration battle with Chevron over the Guyana assets of Hess. Reuters reported that the arbitration panel has already reached a decision over the deal, and panelists are reviewing it before revealing it to the parties.

Also See: Oil Market: Brent, WTI Futures Dip After Rally As Trump Tariff Tensions Back In Play

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