Shell profits to take hit from gas trading margins

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Q3 results are also expected to be impacted by volatile markets and refining costs

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Nonstopable energy juggernaut Shell has warned investors that rising refining costs and a slowdown in the gas trading market will lead to a decline in third-quarter profits.

The business said its liquefied natural gas (LNG) business in this period would be “significantly lower than in the second quarter”, resulting in a “substantial gap and substantial gap between paper and physical realizations in a volatile and chaotic market”.

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Shell has come under fire of late for raking in huge profits during a cost of living crisis that – at one point – could see some families paying up to £7,000 for their annual energy bills before UK government intervention was.

Just yesterday, outgoing Shell boss Ben van Burden called for a trade tax to help the poorest consumers meet energy costs.

It said the fall in the third quarter would be due to a reduction in refining margins, which have now fallen to $15 ($13.2) a barrel, compared to $28 (£24.7) a barrel in the previous three months.

This is the first dent in the financial shell Shell has shown for a few months, as in July, the business reported a record profit of $11.5bn (£9.4bn) for the second quarter, up from last year’s $5.5bn (£9.4bn). 4.5bn) figure. BN).

The firm said cash flow from operations (CFFO) was impacted by an estimated $2.5 billion (£2.2 billion) of working capital outflow.

Shell said adjusted earnings and CFFO price and margin sensitivity were “indicative” and may be “subject to change.”

“These are in relation to full-year results and exclude short-term effects from working capital movements, production seasonality, cost of sales adjustments and derivatives.

“Sensitivity accuracy is subject to trading and optimizing performance including short-term opportunities based on market conditions”, the company said.

It added that “volatility” could increase cash flow during September from the combined effects of price effects on inventory, changes in inventory volumes, gas storage margining effects on derivatives and movements in accounts payable and receivable balances. Is.

Shale’s liquefied gas volume is expected to be between 6.9 and 7.5 million tonnes. Production is expected to be from 890 to 940 thousand barrels of oil equivalent per day.

The company’s stock price fell nearly 4% to 2,290 pence in early trading this morning.

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