Exxon Achieves Higher Q4 and Annual 2011 with Increased Oil Prices

The success of an oil business is achieved by simply pumping plenty of crude and selling it for higher oil prices. For many oil companies, Exxon Mobil Corp is one of those who have not been experiencing any difficulty when it comes to selling crude at increased costs. In quarter four alone, Benchmark crude oil prices was raised by 10%.

Exxon, the largest company of oil in the United States, recently reported its earnings for quarter four and the whole year of 2011. The company had a difficult time in boosting production for 2011. The challenges was partly caused by the fact that majority of its overseas contracts. These contracts regulate the quantity of crude that the company can merchandise as oil prices increase. Moreover, several of the companies’ fields are already old and not as productive as they used to be.

Within July to September, the oil and gas production of Exxon declined by 7 and 3 percent respectively.

Exxon’s refining business has been affected by increasing oil prices and decreasing gasoline prices. Recently, Exxon made an announcement that it will sell its share in a Japanese marketing and refining business for a price of $3.9 billion. The decision caused a reduction in Japan’s demand for fuel and Exxon’s changed focus in oil discovery.

In the coming months, investors will look at details regarding the strategy of the company to increase its production of oil which includes plans for the recent exploration contract signed by Exxon with Iraqi Kurdistan. Moreover, investors will also monitor if the company will have succeeding refinery sales after its recent sale of its refining business in Japan.

Since Exxon is the largest and widely respected company in the oil industry, whatever happens to them definitely matters. It is known for its accurate readings of oil supply and demand worldwide and for creating operational strategies according to extensive research. This means that if Exxon will have challenges in raising its production of oil, many others will also experience the same thing.

Analysts surveyed by FactSet predict Exxon to profit around $1.97 a share on its revenue amounting to $118.83 billion. In the same quarter of the previous year, Exxon’s total earnings amounted to $9.25 billion. This is around $1.85 a share on a profit of $105 billion.

By: Chris Termeer