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Chevron Gains Gather Pace

According to a report issued by the second-largest US oil company on Wednesday Chevron Corp should post higher first-uarter earnings than the previous quarter as record oil prices outweigh weak margins from refining and marketing

According to a report issued by the second-largest US oil company on Wednesday Chevron Corp should post higher first-quarter earnings than the previous quarter as record oil prices outweigh weak margins from refining and marketing.

Chevron said its oil and gas production in January and February was 2.61 million barrels of oil equivalent per day, basically flat with the fourth quarter, as higher international natural gas output offset shortfalls for oil.

Benchmark oil prices averaged a record of about $98 a barrel in the quarter, driving higher first-quarter earnings from Chevron's exploration and production business. But it said profits from its refining and marketing business "are expected to remain at the low level recorded" in the fourth quarter.

That compares to an average price of $51.60 per barrel in the year-earlier quarter. Its international price for crude in those months rose to $83.36 per barrel from $80.43 per barrel in the fourth quarter.

Chevron's US natural gas prices for that period were up more than 15 percent from the previous quarter, while international natural gas prices rose 13 percent.

Its realized margins in the first quarter are expected to be lower than industry indicator margins due to refinery downtime and high crude oil prices, Chevron said.

Chevron also said it expects "foreign exchange effects" to hurt earnings in the first quarter more than they did in the fourth quarter. The company's shares closed up 0.8 percent to $89.95 on the New York Stock Exchange on Wednesday.