Chevron Corp.: Reflecting an industry trend, Chevron...

Chevron Corp.: Reflecting an industry trend, Chevron said its third-quarter earnings fell 22% because of lower oil and natural gas prices and depressed demand because of the recession.

The San Francisco-based energy giant said its net earnings for the quarter were $313 million, down from $403 million in the quarter a year earlier. Revenue was down to $10 billion from $10.6 billion.

Chevron Chairman Kenneth T. Derr attributed the drop to a “sluggish U.S. economy, industrywide overcapacity in chemicals, intense competition in some of our key gasoline markets and low prices for natural gas.”

Eugene Nowak, with Dean Witter Reynolds in New York, said the earnings were not surprising. “The economy being sluggish weaves its way through virtually their entire operation,” he said.

Chevron’s average price for crude oil in the quarter was down $5.25 a barrel to $16.95 compared to the quarter last year, when the Iraqi invasion of Kuwait spurred a rapid run-up in prices. Similarly, natural gas prices were off 8% from a year ago, which is especially significant to Chevron, the nation’s largest natural gas producer.

Earnings were down in Chevron’s domestic exploration and production operations, as well as its U.S. refining and marketing unit. International earnings were stronger; exploration and production earnings were about flat after excluding special items; international refining and marketing were up significantly, and chemicals were down, excluding special items.