(Sharecast News) – Shell warned of a significant decrease in its second-quarter gas trading results compared to the prior quarter on Friday.
The revelation came after a similar one from US rival Exxon Mobil overnight, as Shell disclosed that it expected to record $3bn in writedowns for the quarter.
It said the primary factor contributing to the anticipated decline in gas trading results was a 1% increase in the discount rate used for impairment testing.
As a result, the world’s largest liquefied natural gas (LNG) trader said it had taken steps to reflect the new assessment in its financial outlook.
Additionally, Shell said its chemicals and products business was also projected to experience reduced trading performance in the second quarter, compared to the first.
The indicative refining margin, a key metric in the sector, was expected to drop from $15 per barrel to $9 per barrel.
“Trading and optimisation is expected to be significantly lower compared to a strong first quarter, due to seasonality and fewer optimisation opportunities,” Shell said in its update.
*The second quarter contribution is expected to be in line with the average contribution of the quarter in 2021 and 2022.”
At 0906 BST, shares in Shell were down 0.4% at 2,255.5p.
Reporting by Josh White for Sharecast.com.
