As oil companies' profits plunge, industry braces for more turmoil

After months of falling crude prices, major oil companies are reporting stunning profit declines that are expected to cause more turmoil on global stock markets this winter.

See Full Article

British oil company BP said Tuesday that its fourth-quarter earnings plunged a whopping 91 per cent because of the sharp decline in oil prices. The company’s underlying replacement cost profit fell to $196 million from $2.2 billion this time last year.

BP said 2015 was its worst year in at least three decades. The company will cut an additional 3,000 job losses globally by the end of 2017.

“It's going to be a very turbulent year for our industry," BP CEO Bob Dudley said in London.

Although BP’s financial woes are still tied to massive costs related to the company’s 2010 Deepwater Horizon oil spill in the Gulf of Mexico, other major industry players are not faring well this quarter either.

Imperial Oil Ltd., a Calgary-based subsidiary of ExxonMobil, also reported a dramatic decline in profits on Tuesday. It earned $102 million or 12 cents per diluted share in the fourth quarter, down from $671 million of 79 cents per diluted share.

The Texas-based ExxonMobil, meanwhile, reported a fourth-quarter profit of $2.78 billion. That may have exceeded Wall Street expectations, but overall projections for the oil and gas industry have been “woefully low” in recent months, said BNN reporter Jameson Berkow.

After the benchmark for internationally-produced oil,Brent crude, hit a 12-year low of $27.10 a barrel in January, experts predict that things will only get worse when oil companies announce their first-quarter results for 2016, about three months from now.

“Just looking at the numbers so far, you can see how much financial carnage is being exacted on the oil and gas industry globally,” Berkow said. “What that means for Canada, as a marginal producer, is nothing particularly positive.”

Benchmark U.S. oil was down $1.51, or 4.9 per cent, to $30.09 per barrel on the New York Mercantile Exchange on Tuesdaymorning, a day after it plunged nearly 6 per cent. Brent crude was down $1.66, or 4.9 per cent, to $32.60 a barrel in London.

With files from The Associated Press



Advertisements

Latest Economic News

  • Tesla swings to lost in 4Q, says Model 3 on target

    Economic CTV News
    DETROIT -- Unable to string together profitable quarters, electric car and solar cell maker Tesla Inc. reported a loss for the last three months of 2016. Tesla posted its first profit in three years in last year's third quarter and had predicted net income in the fourth quarter. Source
  • Tesla swings to loss in 4Q, says Model 3 on target

    Economic CTV News
    DETROIT -- Unable to string together profitable quarters, electric car and solar cell maker Tesla Inc. reported a loss for the last three months of 2016. Tesla posted its first profit in three years in last year's third quarter and had predicted net income in the fourth quarter. Source
  • United Airlines enters basic economy fare wars in the U.S.

    Economic CTV News
    On Tuesday, United began selling basic economy fare tickets on select domestic routes in the U.S., joining American Airlines and Delta in offering a budget option for fliers. It's a move aimed at staying competitive in a market that's becoming increasingly crowded with low-cost and ultra-low cost carriers. Source
  • SodaStream recalls bottles at risk of bursting

    Economic CBC News
    SodaStream Canada has recalled some one-litre bottles because consumers could be injured if the bottles rupture while the contents are being carbonated. The recall was issued jointly by Health Canada, the United States Consumer Product Safety Commission and SodaStream Canada Ltd. Source
  • Good news for Bombardier? Business jet sales may be bolstered by Trump tax cuts

    Economic CTV News
    MONTREAL -- The U.S. government's plan to cut corporate taxes will bolster the business jet industry which last year had its weakest performance since 2004, an association representing the sector said Wednesday. "It will be a good shot in the arm for the industry," said Pete Bunce, CEO of the General Aviation Manufacturers Association. Source
  • Tim Horton's parent buys Popeyes chicken

    Economic CTV News
    Restaurant Brands International, the parent company of Burger King and Canada's Tim Hortons donut shops, said Tuesday it has reached a deal to buy American fried chicken chain Popeyes Louisiana Kitchen. The sale price is US$1.8 billion, or US$79 per share, according to a statement, representing a 27 percent premium over Popeyes' recent average stock price. Source
  • Apple acquires facial recognition start-up

    Economic CTV News
    RealFace specializes in developing artificial intelligence (AI) based facial recognition software. Its first consumer application, Pickeez, can find all the photos of a given person on a smartphone or in a Facebook folder and can even pick the best shots. Source
  • TransCanada asks shippers to support new natural gas pipeline tolls

    Economic CTV News
    CALGARY -- TransCanada (TSX:TRP) is proposing a new pipeline tolling system it says will allow western Canadian natural gas to be shipped to Ontario at lower rates to better compete with growing American supplies. The Calgary-based energy transport company is inviting shippers to sign long-term binding commitments by March 9 to move gas on its underutilized Canadian Mainline system from a shipping centre in Alberta to a hub in southern Ontario. Source
  • Saputo poised to gain full control of Australia's Warrnambool dairy

    Economic CTV News
    MONTREAL -- Canadian dairy giant Saputo Inc. is poised to gain full ownership of Warrnambool Cheese and Butter Factory Co. after Lion Dairy and Drinks accepted a sweetened offer to sell its minority stake in the Australian cheese and dairy producer. Source
  • SodaStream recalls thousands of bottles due to danger they could rupture

    Economic CTV News
    OTTAWA - SodaStream is recalling thousands of its bottles in Canada and the U.S. because of a danger they may rupture when a user is in the process of carbonating water. The maker of water carbonation machines said it was voluntarily recalling the bottles due to a manufacturing defect. Source