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The Murphy Oil Corporation raised its estimate for second-quarter earnings because of reduced exploration expenses, improved refining margins and higher energy prices.
But Simon Henry, Shell's chief financial officer, noted in a conference call that improved refining margins were more the result of supply shortages than stronger demand.
Lower exploration costs and improved refining margins accounted for about 80percentt of the increased estimate, with the remainder the result of higher oil and natural-gas prices, the company said.
The investment is expected to pay a good return through the use of lower-cost crude oil and improved refining technology to increase the yields of higher-margin products.
Oil companies are reporting mixed results for the fourth quarter, depending on how much they benefited from improved refining profit margins and how much they were hurt by oil prices, which averaged $5 a barrel less than a year earlier.
Finally, cheap oil has improved refining margins, and refinery expansions have recently joined the long parade of East Houston construction projects.
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