ExxonMobil is riding an unprecedented gap in the price differential between crude oil and natural gas, as well as an explosion in its own gas holdings, to record profits in its plastics/chemicals business, while nonintegrated producers or those that rely on petroleum-derived naphtha get squeezed. On March 21, as Brent crude, a European benchmark and West Texas Intermediate, a U.S. indicator both rose, trading around $114 and $102/bbl, respectively, natural gas dropped again, to trade just over $4/million BTUs, further emphasizing the company's advantage over rivals like Dow Chemical.
In a March 9, analyst presentation at the New York Stock Exchange, ExxonMobil stressed the growing import of natural gas. The company forecast that energy demand would expand roughly 35% by 2030, with the highest average annual growth over that time period coming in natural gas, at 2% (0.7% for oil). Oil would maintain the largest share of energy demand, at about 200 quadrillion BTUs, but gas would beat out coal, nuclear and renewable energy sources, with more that 150 quadrillion BTUs. The growth in gas demand is expected to be led by power generation with utilities switching to gas from coal to lower their emissions....