(Bloomberg) -- Exxon Mobil Corp. said higher global natural gas prices will increase third-quarter profit by about $700 million, a sum that should help the oil giant reduce its debt pile.
Gas, for years a laggard to more profitable crude, will probably be the biggest uplift to earnings compared with the prior quarter, the Irving, Texas-based driller said in a regulatory filing Thursday.
Surging demand for the fuel has elevated prices from Britain to Beijing. Europe in particular is suffering an acute shortage and faces stiff competition from Asia for supplies as countries work to amass reserves before winter descends on the northern hemishere in a matter of weeks.
Exxon’s profit uplift from gas is likely to be a leading indicator for Big Oil earnings, with Royal Dutch Shell Plc also well-placed to gain from higher prices for the fuel. The extra cash will help Exxon whittle away its borrowings, which rose to a record high last year due to the pandemic-induced crash in oil prices.
Higher oil prices will increase earnings by about $400 million, the company said. Wider refining margins and reduced downtime for maintenance work will add $600 million. Chemicals, which enjoyed record second-quarter profits, will see a $300 million decline in earnings, Exxon said.
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