Exxon Mobil Corp. (XOM) reported its biggest quarterly profit in almost three years as a demand- driven oil rally boosted prices. Second-quarter profit rose to $10.68 billion, or $2.18 a share, from $7.56 billion, or $1.60, a year earlier, the Irving, Texas-based company said today in a Business Wire statement. Exxon had been expected to earn $2.32 a share, based on the average estimate of seven analysts in a Bloomberg survey. Brent crude futures averaged $116.99 a barrel during the second quarter, a 47 percent increase from a year earlier, as economic expansion stoked energy demand and a civil war in Libya disrupted oil exports. Chief Executive Officer Rex Tillerson has orchestrated $38 billion in acquisitions since June 2010 to amass natural-gas fields and the expertise to exploit them. Exxon plans to purchase more gas reserves and is assessing targets in more than a dozen gas-rich shale-rock formations worldwide, Jack Williams, president of Exxon’s XTO Energy unit, said in a July 20 interview. Exxon has also expanded its oil holdings, most recently with the discovery last month of a Gulf of Mexico field that holds the equivalent of 700 million barrels of crude. The estimated size of the field, known as Hadrian, may increase as drilling continues 250 miles (400 kilometers) southwest of New Orleans, the company said in a June 8 statement. Cooling Demand? Exxon isn’t expected to top today’s results for at least the rest of this year, Bloomberg’s survey of analysts shows, amid signs that the oil rally may be cooling. Brent crude traded in London, the benchmark price for two-thirds of the world’s oil, will fall 6 percent during the current quarter and another 3.6 percent during the fourth, according to the average estimate of 31 analysts surveyed. “For the second quarter, crude and gasoline prices were higher, but we’re starting to see some inklings of a softening in demand later in the year,” said Douglas Ober, chief executive officer of the $837 million Petroleum & Resources Corp. fund in Baltimore, whose largest holding is Exxon stock. Some investors are concerned that global consumption of petroleum-based fuels will fall amid sovereign debt crises in Europe and disputes among U.S. political leaders over government borrowing and tax policy. Exxon’s statement was released before the opening of U.S. stock markets. The shares fell $1.06, or 1.3 percent, to $83.31 yesterday in New York Stock Exchange composite trading, and have gained 14 percent this year. The stock has 13 buy recommendations from analysts, 12 holds and one sell. “Until the path to global economic growth is ascertained, it will be difficult for oil markets to focus on much else,” Miswin Mahesh and Amrita Sen, analysts at Barclays Capital, said in a July 26 note to clients. “After all, economic growth is one of the biggest drivers of oil prices.” To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net. To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.

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