Lower margins hit Exxon profits

Oil firms have been hit by lower refining margins

US oil giant Exxon Mobil has seen a 10% drop in quarterly profits, prompted by lower refining margins.

Exxon Mobil said profits had fallen to $9.41bn (£4.5bn), in the three months to September, from $10.49bn in the same period last year.

It is the first time since 2002 that Exxon profits have fallen for two quarters in a row.

Energy firms including ConocoPhillips and BP have also seen quarterly profits fall even as oil prices have surged.

Earnings at Exxon's refining and marketing business fell 27% from a year earlier, dropping to $2bn.

"There's a real bloodbath in refining margins right now, and that will largely offset the higher upstream earnings," said analyst Lysle Brinker at John Herold.

But despite this, Exxon's overall revenue for the period hit a record at $102.3bn, an increase from $99.59bn in last year's third quarter.

And looking ahead the firm said is aggressively seeking new sources of hydrocarbons.

During the third quarter the firm spent $5.4bn on capital and exploration schemes, marking an 8% rise year-on-year.

The latest figures are a reversal of huge profits seen earlier this year, when it saw the highest profit recorded for a US firm with a 2006 net profit of $39.5bn.