The newest measure of the oil industry’s falling fortunes came on Tuesday in the form of a $3.3 billion fourth-quarter loss reported by BP.
For all of 2015, BP said
it lost $6.48 billion, compared with a profit of $3.78 billion in 2014 —
before plummeting oil prices began taking their full toll.
Exxon Mobil, the industry’s largest player, reported a 58 percent decline
in its quarterly profit, hurt also by the fall in oil prices. The
results beat analyst estimates but Exxon’s profit of $2.78 billion was
down from $6.57 billion the year before. Its exploration and production
business lost $538 million in the United States, though its total global
upstream earnings for the quarter were $857 million.
The
results would have been far worse had it not been for its refining and
chemical businesses which have been helped by the low oil and natural
gas prices, vital inputs. It had refining and marketing earnings of
$1.35 billion, up from $497 million the year before. With the price of
oil near $30 a barrel, the company said it would pare share repurchases
as a cost-saving measure.
“It
was another solid quarter for the company,” said Brian Youngberg, a
senior energy analyst at Edward Jones. “Its sizable refining and
chemical operations helps allow it to hold up better than peers in a low
price world.”
The
industry is reeling from the effects of a global glut of oil and
slackening demand on worries of slower international economic growth.
Longer term, there are questions about the value of oil still under the
ground and the sea floor, as climate concerns prompt energy users of all
sizes to seek alternatives to fossil fuels.
BP’s
stock plunged on its earnings results, down more than 8 percent through
midafternoon trading in London. Petroleum futures were off by about 4
percent.
For
big oil companies, the drop in oil prices translates directly into
lower revenue and profitability, particularly in the units of big oil
companies that find crude and produce petroleum.
On Tuesday, BP repeated a commitment it made last month to cut 4,000 jobs
this year in its exploration and production unit, which lost $728
million in the quarter. BP also said it would trim about 3,000 workers
from its marketing and refining business by the end of 2017.
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