In its interim earnings update, Chevron commented that oil production fell in the first two months of the quarter and it received a lower price for the oil it sold.
In addition, results from refining and marketing dropped off as a fire damaged Chevron's refinery in Richmond, California, and Hurricane Isaac disrupted production at a refinery in Mississippi. U.S. production fell by 19,000 barrels of oil equivalent per day in the first two months of the quarter, largely because of Hurricane Isaac, the company said. International production dropped as well. The average price Chevron realized for a barrel of oil in the U.S. dropped to $95.44 in July and August, compared with $103.91 in the April-June quarter.
For international oil, the price dropped to $96.86 from $99.21. Charges for the quarter are expected to be higher than expected as well, and foreign currency losses also hurt results. Consensus forecast net income for Q3 is expected to be $6.2 billion, or $3.08 per share, according to FactSet. Several Wall Street analysts were not to concerned about the earnings warning as they see the events that negatively impacted the quarter to be transitory in nature.
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