Shell on Thursday warned third-quarter profits would be hit by a sharp decline in oil refining margins and weaker natural gas trading.
The energy giant has been making massive profits as oil and gas prices surge but said indicative refining margins had slumped to $15 a barrel compared with $28 a barrel in the previous quarter.
This would have a negative impact of between $1 and $1.4 billion on the segment’s adjusted core earnings.
Indicative margins for chemicals dropped to negative $27 per tonne versus a positive $86 in the second quarter after global demand for plastics slumped.
Shell said its liquefied natural gas and gas trading results were expected to be “significantly lower” due to lower seasonal demand as well as “substantial differences between paper and physical realisation in a volatile and dislocated market”.
Oil trading was expected to be in line with the previous quarter.
“Trading and optimisation results for Integrated Gas are expected to be significantly lower compared to the second quarter 2022 as a result of seasonality and substantial differences between paper and physical realisation in a volatile and dislocated market,” the firm said.
Reporting by Frank Prenesti at Sharecast.com
