Exxon, Chevron Stocks Slip. How Crude Prices Are Knocking Big Oil.

Exxon Mobil warned that lower energy prices would affect the bottom line. (Dreamstime)

Shares of Exxon Mobil , the biggest U.S. energy company, were falling in premarket trading after it flagged that second-quarter profit will take a hit from lower energy prices.

The drop in oil prices will reduce earnings in its upstream unit—the one that extracts oil and gas from the ground—by between $800 million and $1.2 billion. Weaker gas prices will cut as much as $700 million from the bottom line, though some of those losses could be offset by better margins for other energy products, the company said in a securities filing on Monday.

While investors already knew that crude prices fell substantially between April and July, the warning of the impact was surprisingly stark and raises questions about earnings for the entire industry. It follows a notice from London-based Shell that trading profits will be lower than thought.

Exxon stock fell 0.4% to $110.65 before the market opened. Chevron was down by the same amount. Shell’s American depositary receipts rose 0.6%, while BP’s ADRs added 1%.

Those share-price moves came as crude prices fell further. West Texas Intermediate , the U.S. benchmark, retreated 0.4% to $67.68 a barrel. The price is down 17% over the past year. Brent crude , the international standard, declined 0.2%.

It is still a few weeks before oil companies report their earnings for the second quarter. Exxon’s results are due on Aug. 1.

Write to Brian Swint at brian.swint@barrons.com