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Chevron and Exxonmobil reported acute falls in quarterly gains due to the fall in oil prices and the weak refining margins, a sign that the oil industry has begun to feel the impact of Donald Trump’s trade war.
Chevron said Friday that net income fell into more than a third to $ 3.5 billion in the first quarter, below the $ 5.5 billion of the previous year, and a little below the consensus estimates of analysts. The income fell to $ 47.6 billion, below $ 48.7 billion of the previous year, since its global production remained stable.
Exxon, the largest producer of Western oil, reported a net income of F $ 7.7 billion in the three months until the end of March, below $ 8.2 billion one year earlier, and approximately in line with the forecasts of analysts. The revenues of $ 83.1 billion increased slightly for 12 months, but they lost the estreet street estimates.
The oil industry, which enjoyed record profits when prices shot after the large -scale invasion of Russia of Ukraine in 2022, faces the weakening of its products, since the commercial war of the president of the United States, Donald Trump, makes the global economy decrease the speed.
The uncertain economic environment has caused analysts to question whether Chevron and other oil specialties can continue to fulfill the commitments to pay a large percentage of their profits in the returns of the shareholders.
Chevron said it would reduce purchase shares expense in the second quarter to $ 2.5 billion- $ 3 billion, compared to $ 3.9 billion in three months until the end of March. However, he said that his annual guidance guide of $ 10 billion-20 billion remained unchanged. Last year, Chevron bought $ 15.2 billion of its shares again.
Chevron’s shares were low 1.8 percent in market prior to the market in New York on Friday, but then recovered and rose just over 1 percent to $ 138.48 at noon. Exxon shares increased 0.2 percent.
“Investors have focused on the performance of the shareholders and the results of Chevron indicate that it is unlikely to maintain the high level of payments against an environment of uncertain and deteriorated demand,” said Michael Alfaro, director of investments at Gallo Partners, a coverage fund focused on regulatory and energy and industrial policies.
Petroleum prices fell below $ 60 per barrel earlier this week, a level that many producers cannot obtain profits, accumulating pressure on producers to reduce costs and slowed investments. This week, BP said it would reduce its quarterly repurchase of shares at $ 750mn, below $ 1.75 billion in the previous quarter.
Exxon said he was in a better position than his rivals, due to his low levels of debt and cost structure, to resist economic challenges and would not change his strategy.
“In this uncertain market, our shareholders can trust that we are built for this,” said executive president Darren Woods to investors, adding that the fall in oil prices could open opportunities for acquiring companies that are not as well positioned as Exxon.
Exxon is not immune to the impact of tariffs that buffan the global economy, but is well positioned to handle the situation, he said.
“I think there is a sensitivity by the Trump administration and other governments around the world so as not to severely affect the energy sector and the products we produce … There is a very wide recognition of the critical role of the products we produce in each of their economies,” Woods said.
