Oil majors report strong cash flow amid refinery constraints
Exxon Mobil and Chevron reported earnings better than expected, with both stocks rising about 2% as refinery margins surged due to supply disruptions. The companies are preferring to hold cash rather than invest in new refineries or increase buybacks.
Exxon Mobil and Chevron, the two most valuable Western oil companies, reported earnings better than expected, with both stocks rising about 2%. Exxon Mobil generated over $19 billion in free cash flow, using less than half to reduce its debt by one-third. Refinery margins have surged due to the Iran war halting operations; BP earned $47 per barrel through its refineries last quarter, up from $30 the previous quarter and $15 a year ago.
Oil majors are reluctant to invest in new refineries or increase buybacks, preferring to hold cash until oil prices stabilize. Exxon Mobil's CFO stated they will not ride the wave of this cycle.