The US’s biggest oil companies pumped out record profits over the last few months as Americans struggled to pay for gasoline, food and other basic necessities.
On Friday, ExxonMobil reported an unprecedented $17.85bn (£14.77bn) profit for the second quarter, nearly four times as much as the same period a year ago, and Chevron made a record $11.62bn (£9.61bn). The sky-high profits come one day after the UK’s Shell shattered its own profit record.
Soaring energy prices have rattled consumers and become a political flashpoint. “We’re going to make sure everybody knows Exxon’s profits,” Joe Biden said in June.
“Exxon made more money than God this year.”
The record profits came after similarly outsized gains in the first quarter when the largest oil companies made close to $100bn in profits.
High energy prices are one of the major factors driving inflation to a four-decade high in the US. Gas prices have fallen slightly in recent weeks but are now averaging $4.25 a gallon across the US, more than $1 a gallon higher than a year ago.
Consumers are facing high fuel prices not just at the pump. Soaring energy prices are being baked into delivery costs, which is driving up the cost of everything from apples to toilet paper.
Closing summary
Time for a recap…
Two more oil giants have smashed profit records for the last quarter, thanks to the surge in energy prices following the Ukraine war.
ExxonMobil made a net profit of $17.8bn, beating forecasts, while Chevron’s quadrupled its earnings to $11.6bn.
That follows record results at Shell yesterday, just as UK families are warned that average bills will soar this winter.
Charities have warned that some of the most vulnerable households could miss out on the £400 to help with soaring energy bills this autumn:
Energy costs have helped to push inflation in the euro area to a new record high of 8.9% this month.
The eurozone did grow faster than forecast, though, with GDP rising 0.7% in Q2 thanks to a strong recovery in Spain, Italy and France.
Germany stagnated, though, leading to warnings of a winter recession…. as energy-saving measures are brought in.
Portugal’s economy shrank, though, after a strong start to the year. GDP also fell in Latvia and Lithuania as the Ukraine war caused economic disruption.
Struggling UK families have turned to credit to pay their bills, with credit card borrowing jumping at the fastest rate since 2005.
Jane Tully, the director of external affairs and partnerships at the Money Advice Trust, the charity that runs National Debtline and Business Debtline, said the figures were “a warning sign that for some the pressure is already beginning to tell”.
Wall Street is ending July on a strong note.
The S&P 500 index of US stocks is up almost 1%, or 39 points, at 4111, taking its gains this month to around 7%.
The Dow Jones industrial average is 0.35% higher, while the tech-focused Nasdaq Composite has jumped 1.3%.
Apple is 3% higher, while Amazon has surged 11%, after their results cheered investors last night.
Fiona Cincotta of City Index explains:
Amazon trades 11% higher after posting its second consecutive quarterly loss but posted strong earnings.
Sales rose 7% in the three months to June to $121 billion, which marked one of the slowest growth periods in history, although it was still better than forecast.
Amazon reported a quarterly loss of $2 billion against a profit of $7.8 billion in the same period a year earlier. Amazon’s strong revenue guidance also reassured Wall Street.Apple is also rising pre-market after beating on revenue and profits. Apple recorded revenue of $83 billion despite high inflation
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