Exxon Mobil feels the pain as proftis drop again

Exxon Mobil, the largest US oil company, today reported a third straight drop in profits after evaporating demand for energy pulled down prices.

Second-quarter income fell to $3.95 billion (£2.4 billion) from $11.7 billion, a 66% slump in line with those seen by UK rivals BP and Royal Dutch Shell.

Revenues at Texas-based Exxon fell 46% to $74.5 billion from $138.1 billion a year ago.

"It was another painful quarter, not just for Exxon but for the entire sector, because of the dramatic plunge in crude prices," said Gianna Bern of Brookshire Advisory & Research in Illinois. Demand for fuel fell five times faster than global oil output in the second quarter, according to the International Energy Agency in Paris. The resulting oil glut has depressed prices.

The IEA warned the world's appetite for crude will not recover to 2008 levels before 2011.

Exxon pumps more crude than every member of Opec, the organisation of petroleum exporting Countries, except Saudi Arabia and Iran. It is spending more than $79 million a day this year on exploration, refinery expansions and other capital projects.