UPDATE 2-Exxon qtrly profit down 68 pct, misses Street

* Q3 oil and gas output up 3 pct

* Shares down about 2 percent premarket

* Q3 98 cts/shr v. analysts' $1.03/shr (Recasts first paragraph, adds analyst comment, background, byline, updates share price)

HOUSTON, Oct 29 - Exxon Mobil Corp on Thursday said its quarterly profit fell 68 percent, missing Wall Street estimates, as the global recession bit into fuel demand and crude oil prices fell from year-ago levels.

Exxon, the world's largest publicly traded oil company, and others have seen profits hit as ongoing weakness in world economies hurt demand for energy.

Stockpiles are high, and both crude oil and natural gas prices declined sharply from year-ago levels in the quarter.

The Irving, Texas company's profit in the quarter was $4.73 billion, or 98 cents per share, compared with $14.83 billion, or $2.85 per diluted share, in the same quarter a year earlier.

Analysts on average had expected a profit of $1.03 per share, according to Thomson Reuters I/B/E/S.

Phil Weiss, energy analyst at Argus Research, said the earnings miss may be attributed to higher-than-expected depreciation associated with the company's new projects.

"Depreciation may be coming in higher, Weiss said. "They have so many projects coming online."

Exxon has so far this year spent $19 billion on projects aimed at boosting oil and natural gas output.

"We are well-positioned for continued production growth with projects such as QatarGas, RasGas and Gorgon LNG which will contribute additional long-plateau production for decades and provide Exxon Mobil with a strong foundation," Rex Tillerson, Exxon's chief executive, said in a statement.

Oil and gas output in the quarter rose 3 percent, helped by the start-up of several major liquefied natural gas projects in Qatar, Exxon said.

Revenue fell to $82.26 billion from $137.7 billion a year ago.

Exxon's shares fell to $72.37 in premarket trading from Wednesday's New York Stock Exchange close of $73.84.