ConocoPhillips (COP) warned that third-quarter results will be
hurt by continuing weakness in North American natural-gas prices
and refining margins, as well as shutdowns for planned
maintenance.
Unlike its rivals, Conoco is more exposed to natural gas prices,
which have recently rebounded a bid from multiyear lows. Conoco
said Friday the average market price was down 67% from a year
earlier, when commodities began their slump from record highs.
The company's third-quarter outlook comes as oil explorers and
producers continue to cope with falling demand as consumers and
industry cut back on consumption. The waning demand has led to a
fuel glut, which has pressured the margins for diesel and
gasoline.
ConocoPhillips said daily output averaged about 1.78 million
barrels of oil equivalent per day in the third quarter, excluding
its 20% stake in Russia's Lukoil Holdings (LKOH.RS). That business
will add $33 million to the third quarter's results as
second-quarter earnings ended higher than Conoco's estimate. The
production figures compare with 1.86 million in the prior
quarter.
ConocoPhillips also said it expects results from its midstream
and chemical operations to improve slightly from the second
quarter, but that its refining and marketing operations to be
"significantly impacted" by continued low margins.
In recent premarket trading, shares were down 1.7% to $44.74 as
stock futures sold off following weaker-than-expected U.S.
unemployment data for September.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com