Shell PLC weighed in with what is likely to be part of a sectorwide rebasement of forecasts as it reported a sharp decline in refining profit margins for the third quarter due to weaker global demand.
In a trading update ahead of its quarterly results, Shell noted that indicative refining margins fell by nearly 30%, dropping to $5.5 per barrel from $7.7 in the previous quarter.
The company also stated that its oil products and chemicals trading earnings would likely be lower than in the second quarter. Refining margins worldwide have been under pressure, impacted by slowing economic growth, particularly in China, and new refineries starting operations.
On a more positive note, Shell raised its liquefied natural gas (LNG) production forecast to between 7.3 million and 7.7 million metric tons for the quarter, an increase from its previous estimate of 6.8 million to 7.4 million tons. LNG trading performance is expected to remain steady compared to the prior quarter.
Shell also revised its outlook for upstream oil and gas production, raising it to 1.74 million to 1.84 million barrels of oil equivalent per day, up from its previous forecast of 1.58 million to 1.78 million.
Exxon Mobil was the rather overweight canary in the coal mine for the industry when last week it was the first to warn of the impact of waning oil prices. Crude dropped 17% in the third quarter.
https://www.proactiveinvestors.co.uk/companies/news/1057718/shell-follows-exxon-as-it-hits-the-downgrade-button-1057718.html
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