Third-quarter 2024 earnings down year-over-year on lower commodity prices, refining margins

A group of 53 US-based oil and gas producers and refiners announced combined net earnings of $24.9 billion in third-quarter 2024, a decrease from net income of $37.8 billion a year earlier, due to lower commodity prices and weaker refining margins.

Brent crude oil prices averaged $80.03/bbl in third-quarter 2024, compared with $86.64/bbl in the previous year's third quarter. West Texas Intermediate (WTI) averaged $76.43/bbl in third-quarter 2024, compared with $82.3/bbl in third-quarter 2023.

For third-quarter 2024, US crude oil production averaged 13.27 million b/d, compared with 13.05 million b/d in third-quarter 2023, according to data from the US Energy Information Administration (EIA). US natural gas liquids (NGLs) production averaged 6.93 million b/d during the quarter, compared with 6.64 million b/d a year ago.

At end-September, US commercial crude oil stocks stood at 422.7 million bbl, an increase from 417 million bbl in September 2023, but below the 5-year average of 437.6 million bbl.

US Strategic Petroleum Reserve (SPR) at end-September was 382 million bbl, compared with 351 million bbl a year earlier and a 5-year average of 534 million bbl.

The third quarter of 2024 presented challenges for US refiners, with decreased refining margins and fluctuating demand impacting profitability. US refinery inputs were 16.92 million b/d in quarter, compared with 17.02 million b/d a year earlier and 16.96 million b/d for the previous quarter. Refinery utilization rate was 92.3% for third-quarter 2024, compared with 93.1% in the previous year's third quarter and 92.5% in second-quarter 2024 (OGJ Online, Aug. 29, 2024). 

Refining margins declined sharply from historically high levels as industry capacity additions outpaced global demand. According to Muse, Stancil & Co., refining cash margins in third-quarter 2024 averaged $18.81/bbl for Middle-West refiners, $12.75/bbl for West Coast refiners, $11.32/bbl for Gulf Coast refiners, and $5.0/bbl for East Coast refiners. In the same quarter of 2023, these refining margins were $24.71/bbl, $37.23/bbl, $26.8/bbl, and $20.63/bbl, respectively.

Natural gas spot prices at Henry Hub averaged $2.11/MMbtu in third-quarter 2024, compared with $2.59/MMbtu for the same quarter a year ago. US marketed gas production dropped to 113.5 bcfd from 113.64 bcfd a year earlier, according to EIA data. 

Working gas in storage ended the quarter at 3,615 bcf, compared with 3,490 bcf for the same period in 2023 and a 5-year average of 3,438 bcf. US LNG exports averaged 11.43 bcfd during the quarter, flat with the previous year's third quarter.

A sample of 13 companies based in Canada, including oil and gas producers and pipeline operators, announced combined earnings of $9.78 billion (Can.) in third-quarter 2024. In third-quarter 2023, this group’s total earnings were $8.22 billion.

WTI/WCS (Western Canadian Select) spread moved to $13.51/bbl in third-quarter 2024 from $12.86/bbl in third-quarter 2023 and $13.54/bbl in second-quarter 2024. 

US oil and gas producers

ExxonMobil Corp. reported a net income of $8.6 billion for third-quarter 2024, down from $9.07 billion in third-quarter 2023 and $9.24 billion for second-quarter 2024. 

During third-quarter 2024, the company achieved a record production level of 4.6 million boe/d, marking a 5% increase. This growth was bolstered by the acquisitions of Pioneer Natural Resources and Denbury Resources, which enhanced Exxon's portfolio and production capacity (OGJ Online, July 13, 2023; Nov. 6, 2023). Additionally, the company increased its quarterly dividend by 4%. 

ExxonMobil’s year-to-date earnings were $26.1 billion versus $28.4 billion in the same period last year. Earnings decreased as industry refining margins and natural gas prices declined from last year's historically high levels, partially offset by favorable timing effects mainly from derivatives mark-to-market impacts. 

Strong advantaged volume growth from Guyana and Permian assets including Pioneer, and increased high-value product sales more than offset lower base volumes from divestments of non-strategic assets and scheduled maintenance. Structural cost savings partly offset higher expenses from depreciation, scheduled maintenance, development of new businesses and 2025 project start-ups. 

Chevron Corp. reported earnings of $4.5 billion, a 31% decline from the previous year, attributed to lower oil prices and weaker refining margins. 

The company's US oil and gas production surged by 14%, reaching 1.61 MMboe/d. This increase was primarily driven by its shale operations and the acquisition of PDC Energy (OGJ Online, May 22, 2023). Worldwide net oil-equivalent production was up 7% from a year ago. Capital expenditure in third-quarter 2024 was down from last year largely due to the absence of the acquisition of a majority stake in ACES Delta LLC.

Chevron intends to divest $10-15 billion in assets by 2028 and aims for substantial cost reductions by 2026, highlighting a strategic focus to optimize its portfolio and strengthen financial resilience.

ConocoPhillips reported earnings of $2.1 billion for third-quarter 2024, down from $2.8 billion a year ago, primarily due to the impact from lower prices. Total revenue stood at $13.6 billion, down from $14.9 billion the previous year. ConocoPhillips’ 9-month 2024 net earnings were $6.9 billion, compared with 9-month 2023 earnings of $8.0 billion.

The company achieved a 3% year-over-year increase in production during the quarter, averaging 1.92 MMboe/d. Notably, its Lower 48 production reached a record 1.15 MMboe/d.

The company raised its ordinary dividend by 34% to $0.78 per share and expanded its share repurchase authorization by up to $20 billion.

Occidental Petroleum reported a profit of $964 million, a 14% decline in overall earnings due to asset sales losses and lower chemical segment outcomes. 

The company's oil production increased by around 16%, reaching 1.4 MMboe/d. This growth was partly due to the acquisition of CrownRock, which enhanced Occidental's production capabilities (OGJ Online, Dec. 11, 2023). 

Occidental reduced its long-term debt by $4 billion through cash and asset sales, achieving nearly 90% of Occidental's short-term debt reduction target.

EOG Resources reported net income of $1.67 billion, down from $2 billion a year ago. Total production was 1.1 MMboe/d, with crude oil comprising 50% of the total. EOG also increased regular quarterly dividend by 7% to $0.975 per share, a $3.90 per share indicated annual rate.

US independent refiners

Marathon Petroleum Corp. reported a net income of $622 million, an 81% decline from the $3.3 billion net income in the same quarter the previous year. The third-quarter 2024 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) were $2.5 billion, compared with $5.7 billion for third-quarter 2023.

The company's refining and marketing margin decreased to $14.35/bbl from $26.16/bbl a year earlier, reflecting the broader industry trend of narrowing margins. Marathon's crude capacity utilization was about 94%, with a total throughput of 3 million b/d. 

The company approved an additional $5 billion share repurchase program, bringing the total available for buybacks to $8.5 billion. 

PBF Energy reported a net loss of $286 million, compared with earnings of $786 million a year ago. The loss was attributed to a significant decline in refining margins. The gross refining margin dropped by 69.4% from the previous year, standing at $6.79/bbl in the third quarter. The company achieved a crude utilization rate in the low 90% range, reflecting a strategic response to market conditions.

PBF conducted its last major turnaround at its Chalmette refinery and expects fourth-quarter throughput to be 840,000-900,000 b/d.

The company plans to reduce operating costs and expenditures by about $200 million by end-2025 through energy reduction efforts and improved efficiency in refinery turnarounds. 

Phillips 66 reported 2024 third-quarter earnings of $346 million, down from $2.1 billion reported for third-quarter 2023. Refining segment reported a loss of $108 million, compared with earnings of $1.7 billion in the prior year’s third quarter.

Phillips 66 returned $1.3 billion to shareholders through dividends and share repurchases during the quarter. The company progressed asset dispositions totaling $2.7 billion toward its $3 billion target, including recently executed agreements. 

Valero reported net income of $364 million in third-quarter 2024, down from $2.6 billion reported a year ago.

The refining segment's operating income was $565 million, down from $3.4 billion in the same quarter the previous year. Throughput volumes averaged 2.9 million b/d, impacted by heavy maintenance activities. 

Operating income for the renewable diesel segment was $35 million, compared with $123 million in third-quarter 2023. Sales volumes averaged 3.5 million gallons per day (gpd), an increase of 552,000 gpd from the previous year. 

Canadian firms

All financial figures are presented in Canadian dollars unless noted otherwise.

Suncor Energy’s net earnings increased to $2.02 billion in third-quarter 2024, compared with $1.54 billion in the prior year quarter. Adjusted operating earnings were $1.87 billion in third-quarter 2024, compared with $1.98 billion in the prior year quarter, with the decrease primarily due to lower realized crude oil prices and refined product realizations, partially offset by increased oil sands and exploration and production sales volumes, as well as higher refinery production.

The company's total oil sands bitumen production increased to 909,600 b/d in third-quarter 2024, compared with 787,000 b/d in the prior year quarter, primarily due to the company’s increased working interest in Fort Hills and strong mining performance.

Canadian Natural Resources posted adjusted net earnings of $2.27 billion for third-quarter 2024, down from $2.34 billion from third-quarter 2023. Natural gas production decreased by 5% to 2.04 bcfd during the quarter, contributing to a 2% decline in overall production. In response to declining natural gas prices, Canadian Natural plans to drill 74 natural gas wells in 2024, 17 fewer than initially planned. 

During 2024, the company has increased its contracted crude oil transportation capacity to 256,500 b/d, expanding its committed volumes to Canada’s West Coast and to the US Gulf Coast to approximately 25% of liquids production.

Imperial Oil reported net income of $1.24 billion, compared with $1.6 billion in third-quarter 2023. Production averaged 447,000 boe/d, the highest third quarter production in over 30 years, up from 423,000 boe/d in the same period of 2023, primarily driven by Grand Rapids and by production and steam cycle timing at Cold Lake. Refinery throughput averaged 389,000 b/d, compared with 416,000 b/d in third-quarter 2023.

Cenovus Energy reported a net income of $820 million, a 56% decline from the previous year's $1.86 billion. Output decreased to 771,300 boe/d from 797,000 boe/d a year earlier, primarily due to turnarounds at Christina Lake, Rainbow Lake, and other conventional infrastructure. The company also completed a major turnaround at the Lima refinery.