Oil companies post record profits; prices waver

| 1/30/2006

As oil prices roller-coastered on Monday, Jan. 30, both Exxon Mobil Corp. and Chevron Corp. posted record profits for the fourth quarter of the 2005 fiscal year.

Chevron said that it made $4.14 billion for the quarter, up from $3.44 billion for the fourth quarter of the previous year. Exxon, meanwhile, racked up a whopping $10.7 billion for the quarter, up from $8.42 billion the previous year.

Wall Street analysts said both companies benefited from high oil and gas prices during the fourth quarter, according to The Associated Press. One analyst said that Chevron’s profits would have been even higher if not for damages suffered during Hurricanes Katrina and Rita.

Chevron said that the decreased production lowered its annual profit by about $1.4 billion, The AP reported.

Meanwhile, oil prices – which had surged ahead of a meeting of the Organization of Petroleum Exporting Countries – fell off slightly as the meeting date neared. The meeting is scheduled for Tuesday, Jan. 31.

Prices for light, sweet crude fell to $67.55 per barrel in midday trading on the New York Mercantile Exchange.

Forbes reported that the market was still jittery over the possibility that OPEC member Iran could use Tuesday’s meeting to withhold all or part of its 2.4 million barrels a day of oil exports in response to criticism of its nuclear program.

One analyst told the British newspaper The Guardian that if Iran – which contributes about 5 percent to the world supply of oil – made such a move, it could possibly drive oil prices above $90 per barrel.