Chevron strong despite gas slide

Oil and natural gas prices have fallen in recent months

US oil giant Chevron has recorded a sharp rise in annual profits but income in the last three months of 2006 fell, prompted by a slump in gas prices.

Full-year profits hit $17.1bn (£8.6bn), topping last year's $14.1bn, but fourth-quarter profits dropped 9% to $3.77bn from the same period in 2005.

US natural gas prices fell 42% during the quarter, while oil has slipped some 20% from July's peak of $78 a barrel.

Exxon Mobil and Shell both reported soaring annual profits on Thursday.

Oil peak

Exxon's profits hit $39.5bn, a US corporate record, while Shell posted sharply higher profits of $25.36bn.

Despite the quarterly decline, the figures for Chevron - the second largest US energy firm - were above market expectations.

Like other oil firms, Chevron has seen its results impacted by lower oil prices, which peaked in the summer following geopolitical tensions in Iran and Lebanon.

The fall in natural gas prices in late 2006 reversed the rise seen a year earlier after Hurricane Katrina.

Chevron said it would have seen a more dramatic drop in the last quarter if it had not been for the weaker US dollar, which had boosted its sales internationally.