Chevron Corp.'s fourth-quarter profit climbed 20 percent to $4.14 billion, a company record that continued the most prosperous stretch in its 126-year history as the oil company capitalizes on high fuel prices that are squeezing consumers and ruffling politicians.

Its profit of $14.1 billion for the full year was also a record for Chevron. It now has posted record annual profits in each of the last two years, earning a combined $27.4 billion.

The San Ramon, Calif.-based company's earnings for 2005's final quarter, released Friday, represented the most it has made in any three-month period since its inception in 1879. The performance edged the $4.13 billion earned during the second quarter of 2004 the early stages of a two-year boom.

Oppenheimer & Co. Fadel Gheit believes Chevron will set yet another new earnings record this year as the company continues to mine crude oil prices that are expected to remain above $60 per barrel. "We are only scratching the surface," Gheit said. "In my view, this company is hitting on all cylinders."

The windfalls that Chevron has been generating aren't unique in its industry. Exxon Mobil Corp., the world's largest publicly traded oil company, earned nearly $10 billion in the third quarter and may top that performance when it releases its fourth quarter results Monday.

Chevron's latest quarterly profit, translating to $1.86 per share, compared with net income of $3.44 billion, or $1.63 per share, in the comparable 2004 period.

Revenue totaled $53.8 billion, a 26 percent increase from $42.7 billion in the comparable 2004 period.

Despite the robust gains, the quarterly earnings fell 3 cents below the average estimate among analysts polled by Thomson Financial.

Chevron's shares fell 21 cents to $60.01 in midday trading on the New York Stock Exchange.

For all of 2005, Chevron's $14.1 billion profit amounted to $6.54 per share, topping its previous highest annual profit of $13.3 billion, or $6.14 per share, established in 2004. Last year's gains partially reflect Chevron's increased size after completing a $17.8 billion takeover of Unocal Corp. in August.

The Unocal acquisition increased Chevron's supply of oil and natural gas, better positioning the company to take advantage of energy prices that have been driven up by steadily rising worldwide demand and Middle East turmoil.

Last year ended with crude oil selling for about $61 per barrel, up from about $45 per barrel at the beginning of 2005. Meanwhile, natural gas prices finished 2005 at about $10 per thousand cubic square feet, up from $6 at the year's outset.

Energy companies like Chevron have been reaping unprecedented profits from those increases, outraging U.S. lawmakers as they try to placate consumers who have had to change their spending habits to pay higher gasoline and heating bills.

After announcing large earnings increases in the third quarter, the top executives from Chevron, Exxon Mobil and three other major oil companies were summoned to Congress, where they tried to dissuade lawmakers from imposing a windfall tax on the industry's profits.

Chevron's 2005 profit would have been even higher last year if not for extensive damage to its Gulf of Mexico operations caused by Hurricanes Katrina and Rita during August and September.

Those devastating storms hobbled a major Mississippi oil refinery, as well as the Chevron's natural gas production, preventing the company from fully cashing in on the market conditions.

Chevron estimated the decreased production in the Gulf of Mexico lowered its annual profit by about $1.4 billion, with about half the loss occurring during the fourth quarter. Gheit estimated the fourth-quarter production setbacks trimmed Chevron's earnings by about 31 cents per share.

The company has since repaired most of the storm damage, but its production continues to lag below levels before the hurricanes.

Until Katrina struck, Chevron's average oil production in the Gulf of Mexico averaged about 300,000 barrels per day. In fourth quarter, the average fell to about 160,000 barrels per day. This year, Chevron expects to average about 200,000 barrels per day in the Gulf.

Somewhere between 10,000 and 20,000 barrels of production lost last year's hurricanes probably will never be restored, Chevron executives told analysts during a Friday conference call.

Despite its difficulties in the Gulf of Mexico, Chevron expects its oil production to average between 2.7 million and 2.8 million barrels per day, up from 2.5 million barrels per day during 2005.

Chevron's recent success has enriched its shareholders as the company's stock price has climbed by nearly 40 percent since the end of 2003.

At the same time, Chevron and other big oil companies have been trying to dispel perceptions that their soaring profits are unconscionably high.

The U.S. oil and gas industry has recently cited data showing it makes about $8 per $100 in sales well below banking, pharmaceutical and high-tech companies, which all make an average of at least $15 per $100 in sales.

Chevron and other oil companies also are emphasizing that they plan to spend substantially more during 2006 on the exploration for more oil a search that ultimately could increase supplies and reduce the pressure to raise energy prices even further.