Slumping oil demand sinks Exxon's profits

Profits fell at Exxon Mobil as the global pandemic began to erode oil demand. The Texas oil giant lost $610 million in the first quarter, down 126% from the same time last year, the company said Friday.

Revenue was $56.1 billion, down 12% from the same quarter in 2019.

Fewer people flew or drove as the world fought to contain the spread of COVID-19, decreasing the need for jet fuel and gas. That resulted in oversupplied markets and unprecedented pressure on prices and margins, CEO Darren Woods said in a statement.

Despite plummeting demand, Exxon produced 4 million barrels of oil per day, up 2% from the same time last year. Exxon lost 14 cents per share, falling below the expectations of analysts polled by Factset.

"While we manage through these challenging times, we are not losing sight of the long-term fundamentals that drive our business," Woods said. "Economic activity will return, and populations and standards of living will increase, which will in turn drive demand for our products and a recovery of the industry."

The oil industry was facing stark challenges even before the coronavirus hit, when prices were low because of a trade war between the U.S. and China which contributed to a global economic slowdown. As lockdowns began to spread around the world during the first quarter, oil use plummeted and prices fell. Then Saudi Arabia, in a power struggle with Russia, began flooding the market with oil, pushing prices down even further. Oil was priced at roughly $20 a barrel Friday. 

Issues facing the oil industry have cost thousands of energy workers their jobs. California lost 40,700 jobs and Texas, the nation's largest oil producer, has lost more than 30,000. Texas economic research firm Perryman Group predicts the state could lose up to 1 million jobs by year's end. 

Chevron Corp. turned a profit in the first quarter, but the company warned Friday its financial outlook could be depressed  because of reduced demand.

The California-based oil producer captured $3.6 billion in profits, up 36% from the same time last year. Its growth was driven by gains in its refining business and increased production in New Mexico's Permian Basin, CEO Michael Wirth said.

But the boost was also driven by the sale of upstream assets in the Philippines, favorable tax items and foreign currency effects which together totaled $1.2 billion. Chevron's revenues were down 10% to $31.5 billion.

The price of a barrel of U.S. benchmark fell nearly 70% since the start of the year. During that time Exxon's shares fell 33% and Chevron's fell 24%.