đ The money from the war didnât go into oil wells. It went into refineries.
On Friday, ExxonMobil reported its third-quarter results. Profit was $15.4 billion, more than double the $7.5 billion in the same period last year. Adjusted earnings were $4.23 per share, versus market expectations of $4.08. Chevron reported net income of $9.9 billion that same day, up from $3.5 billion a year earlier. BP did even better: $8.5 billion, compared with $2.2 billion a year earlier. Both companiesâ shares hit all-time highs that day.
Hereâs the counterintuitive part: production was down. Exxon averaged 4.5 million barrels a day in the first three quarters of this year, versus 4.7 million last year. Chevron produced 3.9 million barrels a day in the third quarter, down from 4 million last year. They pumped less, but profits more than doubled. The money wasnât at the wellhead; it was in the refineries.
Exxonâs refining division made $7.2 billion in a single quarterâmore than its upstream oil and gas business, which made $7.1 billion. Chevronâs refining profits rose 300% to $4.9 billion, while upstream profits rose just 70%. The money is in the furnaces. Gulf Coast refinery utilization ran at 98% to 100%, while Chevronâs U.S. refineries processed an average of over 1 million barrels a dayâthe most ever.
Refining capacity has been knocked out. Bhandari, co-head of natural resources research for Asia Pacific at Goldman Sachs, estimates that about 2 million barrels a day of refining capacity in the Middle East is offline, Russian refineries have been damaged, and capacity outside China will shrink by another 300,000 barrels a day this year. His forecast for next year: average diesel and jet fuel crack spreads will top $40 a barrel, compared with their usual level of around $20.
Consumers are feeling it, too. According to AAA, the national average price of diesel on Friday was $6.32 a gallon, up 71% from $3.69 a year ago. Regular gasoline was $4.20, versus $3.04 a year ago.
In crypto, the situation is exactly the opposite. The networkâs hashrate is 1,055 EH/s, with 450 new coins issued each day. At a coin price of $76,900, the entire industry earns $34.6 million a day, or $32.8 per PH/s. For a machine rated at 17 joules per terahash, electricity at 6 cents per kWh costs $24.50, leaving $8 in profit. At 8 cents per kWh, gross profit falls to zero.
The three oil companies made $33.8 billion in one quarter. Miners across the network earn about $12.6 billion a year. The difference isnât how hard they work, but who controls the part others canât do without. Refineries control it, so they can set prices. Miners have only interchangeable hashrate, squeezed from both sides by difficulty and electricity costs.
War hasnât driven up the price of oil itself so much as the spread on the processing step. Those on the right side of that spread are the ones collecting the money.
BTC $76,750â$76,942, six-source quotes, down about 2.5% in 24 hours. ETH $2,232â$2,236, down 1.5%.
#äžæŹèȘćœé 瀟ćșBaoluoćžćè”æŹ #Bitcoin #Diesel
On Friday, ExxonMobil reported its third-quarter results. Profit was $15.4 billion, more than double the $7.5 billion in the same period last year. Adjusted earnings were $4.23 per share, versus market expectations of $4.08. Chevron reported net income of $9.9 billion that same day, up from $3.5 billion a year earlier. BP did even better: $8.5 billion, compared with $2.2 billion a year earlier. Both companiesâ shares hit all-time highs that day.
Hereâs the counterintuitive part: production was down. Exxon averaged 4.5 million barrels a day in the first three quarters of this year, versus 4.7 million last year. Chevron produced 3.9 million barrels a day in the third quarter, down from 4 million last year. They pumped less, but profits more than doubled. The money wasnât at the wellhead; it was in the refineries.
Exxonâs refining division made $7.2 billion in a single quarterâmore than its upstream oil and gas business, which made $7.1 billion. Chevronâs refining profits rose 300% to $4.9 billion, while upstream profits rose just 70%. The money is in the furnaces. Gulf Coast refinery utilization ran at 98% to 100%, while Chevronâs U.S. refineries processed an average of over 1 million barrels a dayâthe most ever.
Refining capacity has been knocked out. Bhandari, co-head of natural resources research for Asia Pacific at Goldman Sachs, estimates that about 2 million barrels a day of refining capacity in the Middle East is offline, Russian refineries have been damaged, and capacity outside China will shrink by another 300,000 barrels a day this year. His forecast for next year: average diesel and jet fuel crack spreads will top $40 a barrel, compared with their usual level of around $20.
Consumers are feeling it, too. According to AAA, the national average price of diesel on Friday was $6.32 a gallon, up 71% from $3.69 a year ago. Regular gasoline was $4.20, versus $3.04 a year ago.
In crypto, the situation is exactly the opposite. The networkâs hashrate is 1,055 EH/s, with 450 new coins issued each day. At a coin price of $76,900, the entire industry earns $34.6 million a day, or $32.8 per PH/s. For a machine rated at 17 joules per terahash, electricity at 6 cents per kWh costs $24.50, leaving $8 in profit. At 8 cents per kWh, gross profit falls to zero.
The three oil companies made $33.8 billion in one quarter. Miners across the network earn about $12.6 billion a year. The difference isnât how hard they work, but who controls the part others canât do without. Refineries control it, so they can set prices. Miners have only interchangeable hashrate, squeezed from both sides by difficulty and electricity costs.
War hasnât driven up the price of oil itself so much as the spread on the processing step. Those on the right side of that spread are the ones collecting the money.
BTC $76,750â$76,942, six-source quotes, down about 2.5% in 24 hours. ETH $2,232â$2,236, down 1.5%.
#äžæŹèȘćœé 瀟ćșBaoluoćžćè”æŹ #Bitcoin #Diesel
