Chevron Corp. (NYSE: CVX) has just laid the second ground-breaking path in the oil sector today. It lowered guidance "significantly." We already noted pending layoffs at Schlumberger Limited (NYSE: LTD), but this is a different matter entirely. As if you didn’t guess the outcome of far lower oil prices and the backside of demand destruction…
Chevron noted that its fourth quarter 2008 results are now expected tobe significantly lower than those of the third quarter, with most ofthe decline tied to lower prices for crude oil and natural gas thatnegatively affect earnings for the upstream business.
The company said that total U.S. oil-equivalent production during thefirst two months of the quarter was 39,000 barrels per day lower thanjust the quarter before. U.S. crude oil realizations for the first twomonths of Q4 declined about $50 per barrel to $61.70. Internationalliquids unit realizations of $53.29 per barrel in the first two monthswere also approximately $50 per barrel lower.
It seems a safe bet that Chevron and others will start following the path of Schlumberger in layoffs.
Chevron closed up 0.4% at $74.24 in regular trading, and shares are down about 1.5% after the close.
Jon C. Ogg
January 8, 2009
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