text: Oil & Gas Profits on Downward Slope - Barron's
  https://www.wsj.com/articles/SB122329245309707349
  Oil & Gas Profits on Downward Slope
  THIRD-QUARTER 2008 EARNINGS for almost all oil and gas producers are expected to be significantly above the year-ago period, mainly due to high average prices year over year with oil up 56% and natural gas up 65%.
  Benefits from higher oil and gas prices significantly exceeded the impact from lower production, higher operating costs and increased government take.
  Sequentially, however, most oil and gas producers are expected to report lower earnings, mainly due to lower oil and gas prices and higher operating costs and lower production, mainly due to natural decline and disruptions. Although we expect further decline in oil prices in fourth-quarter 2008, full-year 2008 earnings for most producers are likely to be record.
  We expect 2009 earnings to be much lower than 2008's.
  Major Oils: Third-quarter 2008 earnings are expected to be up by 65% from a year ago on higher oil and gas prices, but flat sequentially as benefits from higher downstream margins offset the impact of lower oil and gas prices and higher operating costs.
  BP (ticker: BP) and ConocoPhillips (COP) are expected to report the highest year-over-year increases, while Chevron (CVX) is expected to top the group on higher earnings increase sequentially.
  Secondary Internationals: In addition to higher oil and gas prices, third-quarter 2008 earnings benefited from increased production, mainly Murphy Oil (MUR) due to its offshore Malaysia start-up. Sequentially, however, earnings could be flat or lower. Because of higher downstream exposure, Marathon Oil (MRO) is expected to report strong sequential earnings increase.
  Independent Refiners: Sharply higher oil prices and lower product demand negatively impacted year-over-year earnings comparisons, except for Tesoro (TSO), which is expected to report a gain from a low a year ago. Sequentially, however, earnings benefited from hurricane disruption, which boosted margins to unsustainable levels.
  Exploration & Production Independents: Earnings are expected to be sharply higher than a year ago, mainly due to strong oil and gas prices, with Comstock Resources (CRK), EOG Resources (EOG) and Devon Energy (DVN) leading the group. Sequentially, however, earnings are expected to be lower, on lower prices and volumes, mainly due to hurricane disruptions. Only Noble Energy (NBL) is expected to report higher results.
  Despite the recent decline, we believe oil prices remain significantly above market-supported levels.
  The global financial crisis is likely to deepen the recession and reduce oil demand. Any attempt by OPEC to defend oil prices could further depress the global economy and fuel inflation. We expect 2009 earnings to be well below 2008's.