Oil Profits Show Signs of Aging

Exxon Mobil Corp.’s disappointing second-quarter results highlight a new reality for the oil business: Increasing profitability amid today’s high prices is increasingly difficult.

…Production woes and cost inflation have affected the entire industry as oil companies spend more on increasingly expensive rigs, equipment and services to tap bigger and more complicated projects.


“Obviously we’re not immune to the impacts of higher costs and we work very hard to offset those,” said Henry Hubble, Exxon vice president of investor relations.

The market has come to view Exxon as the most capable operator in the oil patch. Missing expectations sparked greater skepticism over the industry, even after oil prices briefly rose past the market’s record settlement high of $77.03 a barrel before falling back. Exxon’s shares fell $4.56, or 4.9%, to $88.23 in 4 p.m. New York Stock Exchange composite trading yesterday, contributing to the broader market’s swoon.

Dow Jones Newswires