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Oil Companies Boost Profits as Supply Falls
Oil companies around the world are posting huge surges in third-quarter profits - the results of the fall in supply and the rise of prices.
Exxon’s third-quarter profits are $10.33 billion, a 41% increase, the second-largest among major international oil companies that have announced third-quarter results. Only Royal Dutch Shell Plc, the world’s third-largest energy company by market value behind Exxon and PetroChina Co., boasted a larger jump, by doubling net income to $7 billion. The last time Exxon’s profits exceeded $10 billion for three consecutive periods was 2008, when Brent oil touched an all-time record of $147.50 a barrel and the company reaped $45.22 billion in full-year net income. So far this year, Exxon shares have risen 12 percent, poised for the best annual performance since 2007.
Big Oil's third-quarter financial results highlight a growing problem within the industry. New petroleum sources are increasingly tough and expensive to locate. The best new deposits are found more than a mile under the ocean, in vast layers of sticky Canadian sand or in the frigid Arctic. Many energy experts say oil prices can remain at current high levels, but only if Europe averts a financial collapse, the United States avoids another recession and China, India and other developing countries continue to grow strongly. A survey released this week showed that demand for gasoline in the United States declined by 2.8 percent for the week ending Oct. 21, compared with a year ago. Demand in Europe has also eased, although it has been more resilient in developing countries. Experts say smaller companies will need to step up to satisfy growing world demand. China, India and other developing nations are expected to push the global appetite for oil to a record 90 million barrels per day next year, enough to outstrip supplies.
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