After the bell on Monday, Exxon told investors in a filing that its first quarter profits could wind up exceeding $9 billion, mainly helped along by the rising price of oil.
The company said that between $1.9 billion and $2.3 billion in fourth quarter profit was due to the change in the price of crude. It also estimated about $400 million in additional profit as a result of gas-price changes.
The company said its filing was to offer “perspective” about market and other “planned factors” about its upcoming quarterly report, expected toward the end of the month. It warned that these figures were not an estimate, MarketWatch pointed out.
The company noted that Q1 results could have been as much as $2 billion higher than Q4 2021, when the company posted earnings of $8.8 billion.
But the company’s massive earnings don’t come without potential risks, as Bloomberg noted Monday. Those risks include Democrats in the House who are looking for oil companies to “immediately halt dividends and share buybacks until the war’s conclusion” in Ukraine.
Politicians have been scolding oil and gas companies for a number of things that the industry had no hand in, including prices rising due to the war, prices rising due to the U.S.’s constrained supply of oil and alleged “profit gouging” that is simply margin expansion as a result of higher output pricing.
The same politicians that fail to understand the basic economics behind the industry are also in the midst of trying to figure out a way to bring oil prices lower. President Biden warned last week of “of punishing financial penalties for companies slow-walking projects involving federally owned oil prospects,” Bloomberg wrote.
Democrats took out their ire on Exxon and three other explorers for spending $44 billion on buybacks and dividends last year. We guess politicians won’t be happy until the companies go back to running at massive losses, like they did after the government shut down the economy at the onset of Covid.
House Oversight Committee Chair Carolyn B. Maloney and Environment Subcommittee Chair Ro Khanna are leading the charge against the oil industry.
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