Profit for the biggest U.S. oil companies declined in 1st quarter – but only on paper
Summary
The biggest U.S. oil companies, Exxon Mobil and Chevron, showed lower profits on paper for the first quarter, despite rising oil and gasoline prices. This happened because financial hedges they used to protect against price changes did not work as planned after attacks involving the U.S. and Israel in February.Key Facts
- Exxon Mobil and Chevron reported lower profits on paper for the first quarter of the year.
- Oil and gasoline prices increased sharply during this period.
- The profit drop was due to financial hedges that did not perform well after attacks on Iran.
- These hedges are a common strategy to reduce risk from price changes in the energy industry.
- Both companies still reported adjusted profits above what Wall Street expected.
- Shares of Exxon Mobil and Chevron rose before the stock market opened after the announcement.
- The price of energy was lower at the start of the year, prompting the companies to use these hedges.
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