Oil firms see no quick recovery as profits plunge

LONDON (Reuters) – Falling oil and natural gas prices hit profits at oil majors Exxon Mobil Corp, Royal Dutch Shell Plc and Repsol YPF SA in the second quarter, prompting the industry to cut costs and lower investments.

Shell (RDSa.L) Chief Executive Officer Peter Voser said on Thursday the industry is grappling with a combination of weak demand for energy, excess capacity and high costs, with no early respite expected.

Net income excluding inventory adjustments plunged about two-thirds at Shell and Repsol, repeating a tale told earlier in the week by a string of energy companies including BP PLC (BP.L) and ConocoPhillips (COP.N) and reflecting the sharp drop in oil prices from their July 2008 peak of $147 a barrel.

Tighter refining margins also took a toll, helping knock 58 percent off net income at Finnish oil refiner Neste Oil Corp (NES1V.HE).

Reuters