Exxon Q4 Profits Could Be Impacted by Lower Refining Margins
Exxon Mobil Corporation has recently announced that it anticipates a decrease in profits for the fourth quarter of 2024 due to lower refining margins. The company revealed in a filing to the SEC that this downturn could lead to a negative impact of approximately $1.75 billion. To help mitigate this effect, Exxon plans to rely on gains from upstream asset sales, although it also disclosed an expected impairment charge of around $600 million for the fourth quarter.
Reports suggest that Exxon is likely to post a net profit of $1.76 per share for the final quarter of the previous year, significantly down from $2.48 per share recorded in the fourth quarter of 2023. This decline has been attributed to weaknesses in downstream performance, influenced by less-than-expected demand for fuels and an oversupply from new refineries in Asia and Africa that started operating in 2024. Additionally, low oil prices throughout the quarter have played a role in this projected downturn.
This isn’t the first time that weaker refining margins have posed challenges for Exxon. The company had previously indicated similar impacts on its performance during the third quarter. Despite this recent setback, Exxon remains focused on raising production levels in the longer term. In a December update, the company outlined plans to increase output by 18% by 2030 to 5.4 million barrels per day, a significant rise from the 4.58 million barrels produced daily in 2024.
Exxon’s growth strategy involves plans for higher production levels in key areas such as the Permian and Guyana. The company aims to reach a daily output of 2.3 million barrels in the Permian and 1.3 million barrels in Guyana by 2030. By implementing these initiatives, Exxon looks to strengthen its position in the energy sector and pursue continued growth opportunities.
