Oil supermajor Shell expects significantly lower results from its liquefied natural gas trading business in the first quarter of 2024 after a bumper fourth quarter of last year.
But Shell also told shareholders on Friday its oil trading results are expected to be significantly higher than the last quarter of 2023.
The world’s largest oil and gas trader, said its LNG volumes are expected between 7.2 million and 7.6 million metric tons in the first three months of 2024, compared with 7.1 million tons in the previous quarter.
Forecast: Shell anticipates production in its integrated gas division of between 960,000 to 1 million barrels of oil equivalents per day in the opening three months of 2024
The firm anticipates production in its integrated gas division of between 960,000 to 1 million barrels of oil equivalents per day in the opening three months of 2024, against previous guidance of 930,000 to 990,000 boepd.
However, it warned trading results for the segment are expected to be ‘significantly lower’ than the fourth quarter.
Shell also said indicative refining margins are set to be $12 a barrel, having been $10 in the fourth quarter, while indicative chemicals margins should increase to $151 per tonne from $125 per tonne.
Meanwhile, the FTSE 100 group said it would record an estimated $600million in exploration well write-offs, largely related to projects in Albania.
Shell recorded £22.4billion of profits in 2023, a decline of over 30 per cent on the prior year due to oil and gas prices slumping from extraordinary high levels.
But the earnings result was the second-highest in the company’s 116-year history and beat analysts’ forecasts of £21.2billion.
The London-headquartered business also paid out £18.2billion to shareholders and announced plans to conduct another £2.8billion in share buybacks during the first quarter.
Shell’s latest guidance comes just as oil prices jump above $90 per barrel for the first time since October due to tensions in the Middle East, steady output by OPEC+, and a Ukrainian drone strike on Russia’s third-biggest refinery.
‘Fundamentally, oil prices are cyclical, with ups and downs always to be expected,’ said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
‘However, the trajectory of the price has been particularly bumpy in recent years and it’s unclear when this will smooth out over the longer-term.’
Shell shares were 0.3 per cent higher at £27.72 on Friday morning and have nearly tripled since the beginning of October 2020.
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