Chevron profit more than doubles as fuel demand increases

Chevron Corp. reported its largest profit increase in at least a decade, exceeding analyst estimates, after recovering economies around the world increased fuel demand.

First-quarter net income more than doubled to $4.55 billion, or $2.27 a share, from $1.84 billion, or 92 cents, a year earlier, San Ramon, Calif.-based Chevron said Friday. Excluding severance costs, per-share profit was about $2.38, 43 cents higher than the average analyst estimate compiled by Bloomberg.

Chevron Chief Executive John Watson boosted oil and natural-gas output by 4.5% with new wells from the Gulf of Mexico to Australia. Watson is selling money-losing assets and shifting capital to oil and natural-gas fields that Chevron has been working to bring online for years, said Edward Westlake, an analyst at Credit Suisse in New York.

“Production was above expectations, so it‘s very hard to shoot any holes in their story,” said Robbert Van Batenburg, head of research at Louis Capital Markets in New York. “As long as they continue to bring new projects on line, it‘s blue skies ahead.”

Worldwide demand for crude rose by 1.84 million barrels a day during the first quarter, almost three times the growth rate of the final three months of 2009, according to the International Energy Agency.

Revenue jumped 33% to $48.2 billion, Chevron said. The company‘s oil and gas production increased to the equivalent of 2.78 million barrels of crude a day, a company record, as new wells started output in Kazakhstan, Nigeria, Angola and the Gulf of Mexico.

Chevron shares fell 85 cents to $81.44 after the earnings news.