Exxon Mobil Corporation (NYSE:XOM) is expected to report a 15.6 percent profit decline from a year ago when it announces earnings Thursday morning as the spread between West Texas Intermediate and Brent crude oil narrowed, squeezing refiners' margins.

Analysts polled by Thomson Reuters expect Exxon, one of the world's largest energy companies, to report net income of $8.1 billion, or $1.82 a share, for third quarter 2013. They expect revenue of $107.4 billion. In the same period a year earlier, Exxon posted a profit of $9.6 billion, or $2.10 a share, on $115.7 billion in revenue.

Excluding one-time items, Exxon is expected to report earnings of $1.77 a share, compared with $2.10 per share in the year-ago period.

Exxon operates about 10 percent of U.S. refining production, and as the difference in price between WTI and Brent contracted, the premium Exxon and other refiners could earn selling products refined from WTI at Brent prices fell. That spread was $13 a barrel last year, and this year is just $5 a barrel.

“With Exxon’s above-average U.S. refining exposure, this summer's narrowing of the WTI-Brent spread naturally hit earnings,” Pavel Molchanov, an analyst at Raymond James said.

Thanks to the rapid production of oil from the U.S. Midwest, more oil is being extracted than ever before. The U.S. has now surpassed Russia and Saudi Arabia in oil and natural gas production, according to a recent report released by Pira Energy Group. This could be attributed to hydraulic fracturing, or fracking, and horizontal drilling.

Previously, U.S. crude stored in Cushing, Okla., was shipped north and east, but because of the oil boom in the Midwest and in Canada, refineries in the eastern and northern parts of the U.S., as well as Canada, have had excess crude oil supplies. 

All this has changed with recent pipelines coming online. In effect, these new lines have opened up demand from refineries for the oil stored in Cushing, and that sudden spike in demand has lifted WTI prices.