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Chevron profit rises 36 percent on high oil prices

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THE ASSOCIATED PRESS | April 29, 2011 12:38 PM EST | AP

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SAN RAMON, Calif. — Chevron Corp. said Friday its first-quarter net income rose 36 percent, the latest strong earnings report from a major oil company.

Chevron earned higher prices for its oil around the globe. In the U.S., Chevron sold its oil for an average price of $89 per barrel in the last quarter, compared with $71 a year ago. Internationally, Chevron sold oil for an average price of $95 per barrel, compared with $70 a year earlier.

These higher prices led to a $1.25 billion increase in profit from exploring for and producing oil and gas. Refining profits more than doubled, to $622 million.

In all, Chevron's net income rose to $6.21 billion, or $3.09 per share, from $4.55 billion, or $2.27 per share a year ago. The results topped Wall Street expectations and marked Chevron's best three months since it earned $7.9 billion in the third quarter of 2008.

Analysts say Chevron was able to cut costs while enjoying higher oil prices. The company agreed to sell a refinery in the United Kingdom and other assets in Europe, the Caribbean and Africa that lowered profit margins.

Chevron earned $25 in profit for every barrel of oil it sold, compared with $20 for ExxonMobil, according to Phil Weiss of Argus Research.

"The lower their expenses are, the less sensitive they are to oil prices," Weiss said.

Gasoline prices have topped $4 per gallon in nine states plus the District of Columbia. As oil company profits approach levels of three years ago, when gas prices last spiked in the United States, the industry is fighting a renewed push from President Barack Obama and Democrats to end its $4 billion a year in taxpayer subsidies.

On Thursday, Exxon Mobil reported net income of almost $11 billion, its best quarter making $14.83 billion in the July-September period of 2008. That's the record for a publicly traded company. Also, Shell's profit rose 60 percent to about $9 billion in the first quarter. France's Total SA made about $5.8 billion, up 50 percent. ConocoPhillips' earnings rose 43 percent.

Chevron's revenue rose 25 percent to $60.34 billion in the quarter. The increase in oil prices was partially offset by lower prices in the U.S. for natural gas. International natural gas prices rose slightly.

Chevron shares rose 59 cents to $109.40 in afternoon trading.