Chevron Corporation reported in its interim update that fourth quarter net income is expected to be higher than the $3.7 billion earned in the third quarter 2007.
Higher earnings are expected in the upstream business, which benefited during the fourth quarter from higher prices for crude oil and natural gas. In the third quarter, upstream earned $3.4 billion. For the downstream segment, refined-product margins continued to be weak in the fourth quarter. Earnings for worldwide downstream in the third quarter were $377 million and are expected to remain low in the fourth quarter.
Net income in the fourth quarter is not expected to be as significantly affected by nonrecurring items as in the third quarter.
The interim update contains certain industry and company operating data for the fourth quarter. The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron's quarterly results to be reported on February 1, 2008. The reader should not place undue reliance on this data.
Unless noted otherwise, all commentary is based on two months of the fourth quarter 2007 vs. full third quarter 2007 results.
Worldwide oil-equivalent production for the first two months of the fourth quarter increased about 1 percent to 2.62 million barrels per day.
U.S. crude oil realizations of $80.48 per barrel improved by $11.78, trailing the increase in West Texas Intermediate (WTI) and California heavy-crude benchmark prices. This largely reflects Gulf of Mexico production priced on a lagged basis. International liquids realizations averaged $79.49 per barrel, up $12.38 from the third quarter and in line with the increase in Brent spot prices. U.S. natural gas realizations of $5.73 per thousand cubic feet were up $0.30.
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