It’s no secret that share prices for big oil are down by the past 12 months. These oil giants have fallen sharply from highs when oil was in the $140’s per barrel.  Exxon Mobil (NYSE:XOM) is off about 18% and Chevron (NYSE:CVX) is off about 25%. They are not doing as naughty as emerging market oil giants such as Petro Brasileiro (NYSE:PBR),or Petrobras, nor as poorly as China’s CNOOC Ltd. (NYSE:CEO) and PetroChina (NYSE:PTR).

Petrobras is off nearly 60% from its recent highs,
and CNOOC Ltd. and PetroChina are off
more than 50% and 60% from highs, respectively. Both PetroChina and CNOOC suffer
from retail price caps and high prices for imported crude.

Petrobras, the state oil company of Brazil, has a different problem.
The company has benefited from

some large discoveries off the coast of
Brazil, but the global economic slowdown is hitting PetroBras particularly
tough. 

The grim profitable picture is affecting the Chinese companies as well.
China holds an huge amount of dollar-denominated assets, and the
weaker dollar coupled with the higher-valued RMB has pinched China’s
purse. The managed economy in China will struggle to balance
the demands of its growing consumer course with the weak global economy.
The Chinese oil companies are on the receiving end of the sharp point
of the spear.

Paul Ausick
October 6, 2008