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SAN RAMON, Calif. -- In a dramatic reversal from the favorable market conditions that fueled Chevron's record profits earlier in the year, the second-largest U.S. oil and gas company expects significantly lower profit for the fourth quarter, it reported in an overview of market conditions for the October-December period.
During the first two months of the fourth quarter, Chevron said its crude oil price averaged $61.70 per barrel, a 45 percent drop from the $112.22 a barrel it realized for the entire third quarter.
Chevron said fourth-quarter earnings at its exploration and production arm are expected to benefit by about $625 million from an asset-exchange transaction. It also expects to incur one-time charges related to last year's hurricanes, though lower than similar charges in the third quarter.
Chevron also noted margins for refined products such as gasoline declined markedly from the third quarter to the fourth.
With prices plunging, Chevron and its competitors simply haven't been making as much money as they did during the spring and summer.
Chevron recorded a third-quarter profit of $7.89 billion -- the most for any three-month period in its 129-year corporate history.
Exxon Mobil Corp., the world's largest publicly traded oil company, reported income of $14.83 billion for the same period, breaking its own record for the biggest profit from operations by a U.S. corporation.
Although Chevron didn't provide any specific earnings projections for the fourth quarter, Wall Street is expecting its results to be the poorest of 2008. Chevron is scheduled to report fourth-quarter and full-year earnings Jan. 30.