Exxon's $10.9B in profit disappoints Street

— -- "A rising tide lifted all ships," says Fadel Gheit, an oil industry analyst at Oppenheimer. "The gains from higher oil prices more than offset the lower production volume."

Still, Exxon's results fell short of Wall Street expectations, and its profit was $1 billion below the record it set in last year's fourth quarter. Exxon's net income rose to $2.03 a share, while analysts had expected $2.13 a share.

Exxon's share price fell 3.6% to close at $89.70 in trading Thursday on the New York Stock Exchange.

As energy experts and scientists debate whether the world is running out of oil or not, Exxon says it's spending more on exploration.

In a statement, Exxon CEO Rex Tillerson said, "Spending on capital and exploration projects was $5.5 billion in the first quarter, up 30% from last year, as we continued to actively invest in projects to bring additional crude oil, natural gas and finished products to market."

Analysts say Exxon's lower numbers were caused by everything from the weak U.S. dollar, which means the rest of the world is paying much less per barrel of oil than U.S. oil companies are, to gas prices at the pump not rising as quickly as the cost of crude oil, which squeezes profit margins for U.S. refinery operations.

"It's not a pretty environment to be operating in," says Justin Perucki, an oil analyst at Morningstar, the investment research firm in Chicago. "The U.S. is feeling the brunt of the pain."

While Exxon's earnings may have disappointed Wall Street, record profits by oil companies and rising fuel prices have ignited a huge backlash from some politicians and consumer activists. They're calling for a windfall profits tax and other measures to rein in what they believe to be excessive profits.