Chevron profit should top 4th-quarter levels

NEW YORK (Reuters) - Chevron Corp (CVX.N: Quote, Profile, Research) should post higher first-quarter earnings than the previous quarter as record oil prices outweigh weak margins from refining and marketing, according to a report issued by the second-largest U.S. oil company on Wednesday.

Chevron said its oil and gas production in January and February was 2.61 million barrels of oil equivalent per day, basically flat with the fourth quarter, as higher international natural gas output offset shortfalls for oil.

Benchmark oil prices averaged a record of about $98 a barrel in the quarter, driving higher first-quarter earnings from Chevron's exploration and production business. But it said profits from its refining and marketing business "are expected to remain at the low level recorded" in the fourth quarter.

The company's forecast is basically in line with industry expectations for the quarter, due to the high oil prices. But companies that also refine oil to make gasoline have had weak margins due to their inability to pass higher crude costs to their customers.

In the fourth quarter, Chevron earned $4.88 billion, or $2.32 a share, but its profits from refining, marketing and transportation were off close to 80 percent at $204 million.

The company earned $4.84 billion from its exploration and production unit during the period.

Analysts, on average, expect the company to earn about $2.36 per share in the first quarter, according to Reuters Estimates.

The company said its average realized price for a barrel of oil sold in the U.S. in January and February rose over 6 percent from the fourth quarter to $86.74. That compares to an average price of $51.60 per barrel in the year-earlier quarter.

Its international price for crude in those months rose to $83.36 per barrel from $80.43 per barrel in the fourth quarter.