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SAN RAMON, Calif. -- Chevron Corp. is the latest large oil company to announce impressive first quarter earnings, reporting a 10 percent increase over the same period last year.
The nation's second-largest oil company cited in its report that the realized increase was due, in part, to record oil prices outweighing weak profits from gasoline production. This is not a trend unique to Chevron as ExxonMobil, Royal Dutch Shell and BP PLC all reported significant earnings, Reuters reported. Since 2002, oil prices have spiked by a factor of five. In this quarter alone, oil broke the feared $100 barrel mark eventually rising to an unprecedented $120 per barrel.
Reuters reported that Chevron's net income in the quarter rose to $5.17 billion, or $2.48 a share, from $4.72 billion, or $2.18 a share, a year before. Sales and other revenue in the quarter rose 40 percent to $64.67 billion.
Chevron's profits from its exploration and production unit rose 76 percent to $5.13 billion, while earnings from refining and marketing plunged 84 percent to $252 million, reported Reuters.
The company's production dropped by 1.7 percent to 2.6 million barrels of oil equivalent per day, a result of declining older fields in the U.S. However, margins to produce gasoline have also dropped with refiners fighting an uphill battle against higher crude costs to customers. For example, Reuters reported that first-quarter gasoline prices rose only 33 percent year over year in the U.S., which is less than half crude's rise.
Increased revenues from the leading oil companies have consumers crying foul at the pump, a clarion call that has reached legislators. "Oil companies are racking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices," Sen. Charles Schumer (D-N.Y.) said in a statement after Exxon released its earnings on Thursday. "It's high time for Big Oil to pay its fair share."