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The Wall Street Journal: Oil News Roundup: October 26, 2006 4:56 p.m.

THE WALL STREET JOURNAL ONLINE
October 26, 2006 4:56 p.m.

Crude-oil futures fell by more than $1 a barrel to nearly $60 on the New York Mercantile Exchange, as some traders locked in gains following a two-day rally on colder weather and a U.S. Department of Energy report of an unexpected drop in crude stockpiles. Here’s Thursday’s roundup of oil and energy news:

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EXXON’S WHOPPING PROFIT: Exxon Mobil reported its second-highest quarterly profit ever; and amid continuing political pressure on the oil industry, it said its fossil-fuel production rose 7%, a sign of what it called “active efforts to increase world energy supplies.” The world’s largest publicly traded oil company reported third-quarter net income of $10.49 billion, up 6% from a year ago and the second-best quarter ever for any publicly traded company.

•Shell Profit Falls: Royal Dutch Shell said third-quarter earnings fell from a year earlier, hurt by rising costs, higher taxes and production difficulties in strife-torn Nigeria. But a big asset sale last year made comparisons particularly unflattering, and analysts said Shell did better than they expected in the tough operating environment.

•Citic Makes a Deal: Citic Group, the Chinese state-controlled conglomerate with interests from banking to real estate, said it has reached an agreement to buy an oil field in Kazakhstan from a Canadian company for $1.9 billion. If approved by shareholders and regulators, this would be one of China’s biggest overseas oil deals in its quest to lock in more energy supplies.

•Chinese Companies Close Value Gap: Four years ago, shares of Chinese oil companies traded at a roughly 75% discount to major international energy firms in terms of their price-to-earnings ratios. Today, that discount has narrowed to almost nothing.

•Barclays Buys U.S. Energy Firm: In its first foray into both U.S. and energy private equity, Barclays has taken a 40% stake in Texas-based private-equity fund NGP Energy Capital Management. With $3 billion in assets under management, NGP Energy invests in oil and gas production.

•Exxon Sees no Sakhalin Woes: Exxon Mobil does not expect major issues to arise out of an environmental probe by the Russian government on its Sakhalin-1 project. The same probe has been a headache for Shell, however.

•Venezuela Seeks More OPEC Cuts: Venezuela’s oil minister said OPEC should cut an additional 300,000 barrels a day of crude output at its next meeting in December.

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