January 08, 2025 [Oil Price]- Exxon expects to book a weaker profit for the fourth quarter of 2024 because of lower refining margins, the company said in an SEC filing this week, estimating the size of the negative impact at $1.75 billion.

This impact would be partially offset by gains from upstream asset sales, the supermajor noted, but its fourth-quarter report would still feature an impairment to the tune of some $600 million.

Reuters reported that LSEG estimates see Exxon posting a net profit of $1.76 per share for the final quarter of last year, down from $2.48 per share for the fourth quarter of 2023. The report attributed the downstream performance weakness to lower-than-expected demand for fuels and excess supply from new refineries in Asia and Africa that came online in 2024. Lower oil prices during the three-month period also played a part.

This would be the second quarter in a row that would feature the negative effects of weaker refining margins at Exxon. The company had also warned about such an impact on its third-quarter performance. The update followed an expectations-beating second quarter when Exxon booked its second-highest earnings for a second quarter in a decade as the acquisition of Pioneer Natural Resources fueled a record quarterly production and the highest oil production since the Exxon and Mobil merger.

Despite the weaker refining margins last year, over the longer term Exxon plans higher production. In an update from December, the company said it planned to boost output by 18% over the years to 2030, to 5.4 million barrels in that year, compared with 4.58 million barrels daily in 2024.

Exxon said the increase would be driven by higher production in Permian and Guyana. In the Permian, the supermajor eyes output reaching 2.3 million barrels daily while the Guyana operations should rise to 1.3 million barrels daily by 2030.