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(Bloomberg) -- Exxon Mobil Corp.’s shares fell after the company warned its fourth-quarter earnings will take a hit from lower crude prices and narrowing refining margins during the final three months of 2024.

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Oil prices lowered earnings at Exxon’s production division by about $700 million, while refining margins reduced its profit by a further $500 million compared with the third quarter, Exxon said in a statement Tuesday. Natural gas prices provided a lift of about $200 million while chemical margins shrank.

The stock dropped as much as 1.9%, to $106.70, in New York. It was the fourth-worst performer in the S&P 500 Energy Index by 12:08 p.m. Shell Plc also disclosed a fourth-quarter dip in earnings earlier Wednesday.

Exxon’s update implies fourth-quarter earnings per share will be about 17% lower than analysts’ current estimates, Nitin Kumar, an analyst at Mizuho, wrote in a note. In particular, Exxon faces “significant headwinds” at its refining division, RBC Capital Markets analyst Biraj Borkhataria wrote. The company has the biggest refining footprint among its peers.

“We see this as a negative release and consistent with revisions seen for independent refiners and other majors with heavy refining exposure,” Borkhataria said.

Exxon’s guidance doesn’t take into account operational performance or changes in production levels, but it is a sign that the fourth quarter was tough for Big Oil. Investors are concerned about China’s economy amid ample global crude supplies.

Exxon indicated it will report a $400 million gain from fourth-quarter asset sales, along with charges of the same amount.

(Updates with shares in third paragraph, analysts’ comments starting in the fourth.)

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