Oil and Gas giant Occidental Petroleum Corp. (NYSE: OXY) has had a nice 2% jump this morning following the company's announcement that its fourth quarter profit surged 56%.It really shouldn't come as too much of a surprise that the company was able to rake in strong earnings considering just how high oil prices were during the fourth quarter. Occidental had been expected to show earnings this morning of $1.69 and surprised Wall Street with actual earnings of $1.74.
For the full year, the company posted its strongest ever yearly numbers. The full year profit came in at $5.4 billion, which is 28.9% higher than the $4.19 billion profit that the company realized in 2006.
Looking at the company's oil production,there is a 3.5% increase in the fourth quarter, up to a 590,000 barrel a day average. The extra production came in handy considering the average price the company was able to get for its oil. During the fourth quarter the average realized price per barrel for the company was $80.30. This is over 50% greater than the $52.55 per barrel price tag the company saw back in the fourth quarter of 2006.
So far in 2008, prices have cooled off a bit from their highs, which saw oil bust through the $100 barrier, but we have still managed to stay above $90 a barrel for most of the year, leading me to believe that oil and gas companies will be expecting another quarter of high sales prices for their crude.
OPEC is meeting later this week, and although U.S. President George Bush has recently toured the Middle East trying to convince OPEC nations to increase their oil output, OPEC ministers have hinted that production will remain the same at this week's meeting, and that we can actually expect to see production cuts coming later this spring.
All signs are pointing to another strong quarter for oil companies again this time around.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer
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