BY BEN LEFEBVRE
SAN RAMON -- Chevron Corp said that its oil and gas business activity is set for a year over year drop in the second quarter as lower crude prices and equipment maintenance takes a toll.
In an interim earnings statement, Chevron, the second largest United States oil company in market value after Exxon Mobil Corp, reported steep drops in the average prices it gets for its oil production. United States natural gas prices were up, but Chevron's production is tilted towards crude.
Chevron's interim report, generally considered an earnings bellwether for the United States oil and gas industry, shows that Exxon and other producers might have been stung by the steep drop in oil prices in April amid concerns about the slow global economy.
Chevron and other big oil companies are slated to report full 2Q results in August.
Overall, Chevron produced 2.57 MMbpd of oil and natural gas in April and May, down 2.1% from its average production rate in the full second quarter of 2012. The report compares the first two months of the current quarter to the entire second quarter of 2012 and all of the first quarter of 2013.
Production was flat in the United States, but output in its international operations during April and May was 1.91 MMbpd, down 2.8% from the year before because of maintenance work in Kazakhstan, Australia and Nigeria. Demand for oil and gas also fell in Thailand, Chevron said.
Chevron's oil refining business results were mixed. United States gasoline sales for the entire quarter rose 0.4% year over year to 523 Mbpd. Chevron's refineries processed 1.61 MMbpd, down from 1.8 MMbpd in the second quarter of 2012. United States refining throughput increased 183 MMbpd after the company ratcheted up production at its Richmond, refinery that had been damaged by a fire in August 2012 and finished repairs at its Mississippi refinery.
Dow Jones Newswires