Oil companies give cool outlook

By Tom Bergin

LONDON (Reuters) - Exxon Mobil Corp, Royal Dutch Shell Plc and Eni SpA dashed hopes for an imminent turnaround for the oil industry, saying sluggish economic recovery was weighing on energy demand and prices.

The three posted big drops in quarterly earnings on Thursday after crude oil and natural gas prices plummeted and refining margins were squeezed.

Exxon, the world's largest oil company by market value, said net income fell a slightly-larger-than-expected 68 percent in the third quarter compared with the same period in 2008, to $4.73 billion (2.86 billion pounds).

Shell, Europe's largest oil company, said it was cutting 5,000 jobs after net profit dropped 73 percent in the quarter to $2.99 billion.

Italy's Eni said it was cutting its production forecast for the year due to lower gas demand and project deferrals aimed at saving cash. It unveiled a 58 percent drop in net profit.

For a related graph please click here

The results and pessimistic outlook contrasted with London-based BP Plc's third-quarter earnings on Tuesday, which, though lower, smashed forecasts by 50 percent, lifting sector shares on hopes the industry would weather the economic slump better than expected.

Shell and Eni's cautious comments echo worries in recent days about the fragility of the economic recovery, after weak U.S. new home sales data which also weighed on crude prices.