Chevron Corporation, the second-largest US oil company, reported a 43 per cent jump in quarterly profit yesterday, beating Wall Street forecasts as high oil prices and fat refinery margins offset a drop in its oil output.

Chevron's surging earnings were the latest in a string of huge profits reported this week by the industry that has benefited from the highest oil prices in nearly three years, said a report in our sister newspaper, the Gulf Daily News.

ExxonMobil and Royal Dutch Shell both reported higher earnings this week, boosted by their acquisitions and shifts into new projects.

Chevron's better-than-expected profit was largely due to a strong performance by its US and international refineries, which both topped forecasts, according to Fadel Gheit, analyst with Oppenheimer & Co.

Still, the oil and gas production business yielded nearly 90 per cent of the company's profits.

"This is the most leveraged company to oil price in the whole group," Gheit said.

Chevron's second-quarter profit rose to $7.7 billion, or $3.85 per share, from $5.4 billion, or $2.70 per share, a year earlier.

Analysts had expected the company to post earnings of $3.56 per share, according to Thomson Reuters I/B/E/S.

Shares of Chevron were down 0.4 per cent at $104.57 in morning trading on the New York Stock Exchange amid a broad sell-off in the market.

Chevron reported 2.69 million barrels per day (bpd) of oil-equivalent production, compared with 2.75 million in the year-ago.

The company trimmed its full-year oil and gas production forecast to 2.76 million bpd because of slower project ramp-up and a pipeline problem in Thailand.

But it stuck to its 2011-2014 average production growth target of 1 per cent and its 2014-2017 target of 4-5 per cent.

Chevron had targeted average 2011 output of 2.79m bpd, or 1 per cent growth, but that plan assumed lower oil prices. Higher crude prices mean Chevron must leave more production in the hands of its state-owned partners.

European benchmark Brent oil prices averaged $117 per barrel in the second quarter, up from $79 in the same quarter in 2010 and $11 higher than the first quarter. Chevron said in April that it switched to Brent from the US benchmark when calculating production-sharing changes.

Revenue rose 30 per cent to $69 billion.

On Thursday, Exxon Mobil reported a 41 per cent increase in quarterly profit, but fell short of analysts' forecasts. – TradeArabia News Service