Energy Companies Expect Record Profits Again as Strained Supplies Lift Oil and Gas Prices

Energy industry earnings likely more than tripled in the second quarter, as companies hauled in record revenue due to high oil and gas prices.

“This quarter is going to be a blowout,” said Stewart Glickman, energy analyst at CFRA. The two biggest U.S. energy companies, Exxon Mobil and Chevron, are reporting on Friday. Analysts say they will be watching to see how much free cash flow the industry generates, and how much of that is being spent on capital expenditures and returned to shareholders.

Europe’s oil giants Shell and TotalEnergies both announced record profits Thursday and plan to buy back a combined $8 billion in stock during the third quarter. According to I/B/E/S data from Refinitiv, the S & P energy sector is expected to see profit growth of 259% for the quarter, following the first quarter’s 269.5% gain. “They have, I would say, a couple of tailwinds at their back,” said Glickman. “The first for sure is energy prices. But it’s both oil and natural gas. Crude oil, U.S. WTI, was averaging close to $110 in the quarter. That’s up 65% year-over-year. … Natural gas … that was about $7.50 per million BTU. It was under $3 a year ago.”