TotalEnergies Sounds Alarm As Quarterly Profit Drops To 4-Year Low: ‘Market Is Facing Abundant Supply’

TotalEnergies (TTE) posted a sharp drop in adjusted quarterly profit on Thursday, as weaker oil and gas prices dented the bottom line for the French energy major.

The company reported adjusted earnings of $3.6 billion for the quarter ended June 30, compared with $4.2 billion a year earlier. The earnings were in line with analysts’ expectations, Reuters reported, citing LSEG data.

Retail sentiment on Stocktwits TotalEnergies was still in the ‘bullish’ territory at the time of writing.

Brent crude prices have fallen by over 16% in the past year, hurt by a rise in supplies from OPEC+ countries, including Saudi Arabia and Russia. The International Energy Agency has forecasted that oil supply growth will outstrip demand by the end of the year. “The market is facing an abundant supply,” the company said in a statement.

Earlier this month, Exxon Mobil said weak oil and gas prices could lower its second-quarter earnings by $1.5 billion. Norway’s Equinor had also reported a 13% drop in quarterly profit on Wednesday.

TotalEnergies said that its total hydrocarbon production increased by 3% to 2.5 million barrels of oil equivalent per day, driven by the start-up of the Ballymore field in the U.S. and the Mero-4 project in Brazil, which was completed a quarter ahead of schedule. It expects total third-quarter production to rise by 3% compared to the same period last year.

Its LNG production fell 6% year-over-year due to maintenance-related shutdowns in Norway and Malaysia. Its operating income for the integrated LNG segment decreased 20% quarter-over-quarter, primarily due to a lower average selling price and a lack of market volatility, which impacted its trading results.

Its refining segment profit rose 29% compared to the previous quarter, aided by a slight rebound in margins. The company also noted that, due to strong seasonal demand, European refining margins have reached $50 per ton, significantly above the second-quarter average of $35.30 per ton.

Total's U.S.-listed shares have gained 13.4% this year.

Also See: Oil Prices Gain As Inventory Drops, Global Trade Deals Ease Recession Fears

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