Chevron Corporation's fourth-quarter profit rose to $5.3 billion from $3.1 billion the previous year easily topping Wall Street forecasts, but anaemic growth of its oil reserves disappointed investors.

Chevron, like smaller rivals ConocoPhillips and Occidental Petroleum, saw its earnings bolstered by higher oil prices, as well as a rebound in profit margins for petrol and diesel fuel.

The profit rose $2.64 per share, from $1.53 per share, a year before. That easily beat the $2.41 per share that analysts had on average forecast. Revenue in the quarter rose nine per cent to $51.9bn.

Profit from its upstream, or production arm, climbed 16pc to $4.85bn, while the downstream, or refining and transportation business, jumped to a $742 million profit from a year-ago loss.

Given the relative strength of oil compared with natural gas prices, the San Ramon, California-based company is in the fortunate position of getting more than two-thirds of its overall current production from liquids, compared with just more than half for sector leader ExxonMobil.

The company added only a modest 240m barrels oil-equivalent (BOE) to its reserves during the year, just about 24pc of the oil and gas it produced in 2010.

'It was an all-around good quarter, but the reserve replacement was weak,' said Raymond James analyst Pavel Molchanov.

Analysts said the company's reserves did not likely include the Wheatstone or Gorgon natural gas projects that is developing in Australia, and the company said its reserves were reduced by 140m BOE because rising oil prices had increased the share of reserves owed to state-run partners.

'We took several major deepwater projects to final investment decision in 2010, and we expect to recognise reserves for these projects in future years,' chairman and chief executive John Watson said.

Chevron is planning annual oil and gas production increases of 1pc annually through 2014. Growth is expected to pick up to between 4pc and 5pc in the three years after that, but driven largely by massive Australian gas projects.

Chevron also added to its US natural gas position in the fourth quarter with the announced purchase of Atlas Energy.

The US benchmark oil price averaged $85 per barrel in the fourth quarter, up $9 from a year earlier.

On Wednesday, ConocoPhillips and Occidental posted higher profits and unveiled big capital spending increases.-Reuters