Chevron said Friday it pushed its way through a weak third quarter by pumping more oil out of the ground as prices recovered from a severe plunge earlier in the year.
The second-largest U.S. oil and gas producer, boosted revenues by increasing oil production by 11 percent. Its average sale price for crude and natural gas liquids over the past three months was $62 per barrel which is better than last quarter, but well below the $103 it fetched during the same period last year.
Higher crude prices come with their own costs for integrated companies like Chevron, because it costs more for their refineries to make fuel even if less is being used during the economic downturn.
"We continued to experience weak margins on the sale of gasoline and other refined products," said Chairman and CEO Dave O'Reilly. "Weak demand and plentiful supply affected all our major markets."
The refining business saw earnings plummet 89 percent to $194 million in the July-September quarter. Chevron's exploration and production division fared better, especially from its international operations, though profits still tumbled 41 percent to $3.6 billion.
The company, based in San Ramon, California, reported that overall profits dropped 51 percent to $3.83 billion, or $1.92 per share when compared with the same three-month period last year. Last year's third quarter was one of the best for oil companies as crude contracts soared above $147 a barrel.
Chevron followed its peers including Exxon Mobil with results that appeared especially weak when compared with the go-go oil market from last summer.
The company said the weakness in the U.S. dollar this year made it more expensive to operate overseas, resulting in foreign exchange charges of $81 million for the quarter.