Exxon Mobil said Friday that its quarterly profit for the period April-June 2016 fell by 59% due to falling raw materials prices, reports Reuters.
Net profit fell to $1.7 billion in the second quarter of 2016, compared to $4,19 billion in the same period last year. Additionally, Exxon Mobil reported a fall in oil production by 0.6% to 3.9 million barrels. a day.
The company reduced capital expenditure by 38% in the second quarter of 2016 to $5.16 billion. However, the reduction in costs was insufficient to offset the decline of growth in oil prices. Rex Tillerson, CEO of Exxon said that the drop in profits is a reaction to the changing environment of the industry.” However, the results showed the viability of the business model of Exxon, he added.
In may 2016, oil prices gained 8%, which was the longest monthly gain since 2011. However, in July, world oil prices returned to lower and fell more than 20% relative to the maximum 2016 $52,51, which was recorded in early June.