US supermajor Chevron surprised the markets with a gloomy interim performance update yesterday.
Despite high oil prices, the company warned that its fourth-quarter profit would be significantly below Q3 2011, with production falling 113,000 barrels per day short of expectations.
International output reached 1.979 million barrels of oil equivalent a day, down 5.2% on the year but up 2.2% from the third quarter.
The advent of the domestic shale gas industry has seen gas prices in the US continue to fall, biting into upstream profit margins.
High margins in Q3 and the sale of a major refinery in the UK helped the US supermajor to a quarter’s earnings which it cannot best in Q4.
Confirming an industry-wide trend, the company expects to break even on refinery operations. Refining margins averaged $14.45 through December, while marketing margins stood at $5.39.
The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $250 million and $350 million.
Shares of the second-largest US oil company fell 2% in after-hours trading to $105.35, Reuters reported.
Chevron’s Q4 earnings will be released on 27 January.
