Can volatile oil prices create an opportunity for renewables?
New York (CNN Business)Exxon Mobil and Chevron both reported huge losses for the second quarter that were even worse than what Wall Street was expecting — yet another sign of how the Covid-19 pandemic has wrecked the global economy.
Shares of Exxon (XOM) and Chevron (CVX) were each lower in early trading Friday after announcing the results. On Thursday both stocks were among the biggest losers in the Dow.
The coronavirus crisis has decimated demand for oil in 2020. Exxon lost $1.1 billion, the company’s second straight quarterly loss, while Chevron posted a loss of $8.3 billion.
Oil prices went negative. Here’s why
Crude prices have plunged more than 25% this year and even briefly fell below $0 at one point. Oil prices have rebounded lately, however, and they are now hovering around $40 a barrel.
Still, the CEOs of both energy giants didn’t sound overly optimistic about the future.
“The past few months have presented unique challenges,” said Chevron chairman and CEO Michael Wirth. “The economic impact of the response to Covid-19 significantly reduced demand for our products and lowered commodity prices.”
Chevron added in its statement that “while demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels,” and results will likely remain “depressed” in the third quarter.
Exxon chairman and CEO Darren Woods said “the global pandemic and oversupply conditions significantly impacted our second quarter financial results with lower prices, margins and sales volumes.”
The company has cut near-term spending as a result, Woods said, adding that “the company has identified significant potential for additional reductions” that it will announce at a later date.
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