Large oil firms like Exxon, Chevron and Shell posted their biggest profits in 2018 despite global oil prices falling as much as 38 percent.
According to FactSet data, global crude oil averaged about $71 a barrel in 2018–just over 30 percent lower than in 2014, but the five biggest oil companies–Exxon, Chevron, Shell, BP PLC and France’s Total SA combined–are on track to post $84 billion, which is 13 percent higher versus four years ago when oil sold came in at $100 a barrel.
“These companies have figured out how to operate in this new environment, and they have adjusted well” to lower prices, said Brian Youngberg, an analyst at Edward Jones in St. Louis. “The key going forward will be maintaining discipline. This is now a low-growth industry, so you’ve got to invest well.”
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Oil Has Best January to Date
Oil rose 18 percent this month, which marks its best January performance to date. The surge comes despite weak economic data flowing from China, the world’s second largest consumer when it comes to oil.
That performance is reflecting in the United States Oil (NYSEArca: USO) ETF, which is up over 17 percent in January through Thursday’s close.
U.S. West Texas Intermediate crude prices were at $53.79 a barrel, and posted an 18.5 percent monthly gain for January. This was WTI crude’s biggest increase since April 2016 and also its best January since the futures began trading in 1983.
Brent crude is at $61.90 a barrel, which on pace to rise 15 percent in January–its best month since April 2016.