Washington – The oil industry’s profit party is still raging, just not as wildly as last year.
Five of the world’s largest energy companies are expected to report combined third-quarter earnings this week of more than $30 billion, though profits were weighed down by falling prices for natural gas and gasoline.
The industry derived much of its strength from crude-oil prices, which averaged roughly $70 a barrel in the July-September period and hit an all-time peak above $78 amid conflict in the Middle East.
A sharp decline in crude-oil futures since then, however, suggests profit growth in the oil patch could slow further in the months ahead, analysts said.
The major oil companies releasing third-quarter results this week – BP Plc, Chevron Corp., ConocoPhillips, Exxon Mobil Corp. and Royal Dutch Shell Plc – “likely have witnessed peak earnings, at least for the near-term,” said A.G. Edwards energy analyst Bruce Lanni.
In the third quarter of 2005, those five companies earned $32.88 billion.
BP is likely to turn in one of the more disappointing performances because of a wide range of operational troubles, including a pipeline leak in Alaska and the slower-than-anticipated recovery of a Gulf of Mexico platform.
Its third-quarter profit is forecast to decline by about $1 billion.
