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Home industry oil-and-gas shell’s profit to take hit from volatile gas prices, rising costs

Shell’s profit to take hit from volatile gas prices, rising costs


Oil And Gas

 Shell’s profit to take hit

Shell PLC said it expects its third-quarter earnings to be impacted by lower refining margins along with significantly lower profit from trading gas as a global scramble for energy supplies riles markets.

The London-based oil giant said in a trading update that pricing and cost swings from shortfalls of liquefied natural gas would likely cut into profit from its massive gas business, usually its most significant revenue generator.

However, Shell said its overall marketing profit from trading oil and other products was higher in the third quarter compared with the previous quarter.

Shell’s shares fell over 4.5% in early afternoon trading in London. The oil major is set to report full third-quarter earnings later in October 2022.

The third-quarter update comes after Shell and other oil majors posted consecutive quarters of record profits this year, driven by strong demand and skyrocketing commodity prices.

The record profits have allowed the industry to pay out many billions of dollars in share buybacks and dividends, and drawn scrutiny from consumers, governments, and manufacturing trade groups at a time when Europe is bracing for a probable recession.

Shell also said it expects that its chemical-refining business lost money in the third quarter and is expected to slice between $300 million and $600 million off the third-quarter adjusted earnings compared with the second quarter in its products and chemicals business.


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