Chevron’s profit falls 26% to $5.37 billion on lower oil prices

Chevron Corp. posted its biggest second-quarter profit decline in four years and missed analysts’ estimates as crude oil prices and production fell.

Net income dropped 26% to $5.37 billion, or $2.77 a share, from $7.21 billion, or $3.66, a year earlier, the San Ramon, Calif., company said Friday. The per-share result was 19 cents below the average of estimates compiled by Bloomberg.

Chevron’s oil and natural gas output fell 1.6% to the lowest second-quarter average in half a decade as new wells in Angola, the Gulf of Mexico and Pennsylvania failed to make up for declining production from older fields, according to the statement. The price the company fetched for crude sold overseas dropped 5%, while profit from refining crude into fuels tumbled 59%.

Sales dropped 8.4% to $57.4 billion.

Chevron received an average of $94 a barrel for non-U.S. crude during the quarter, compared with $99 a year earlier, according to the statement. The company’s so-called upstream earnings fell 12% during the April-to-June period as worldwide demand for petroleum-based fuels failed to keep pace with production growth.

Chevron’s refineries posted a $766-million profit compared with $1.88 billion a year earlier as prices for transportation fuels fell faster than crude, and the lingering effects of a California refinery fire hindered production.

Refining margins in the U.S., the world’s largest motor-fuels market, narrowed as lower gasoline use reduced retail prices 3.6% to a quarterly average of $3.601 a gallon, based on Energy Department figures.