Shell says weak oil and gas trade hit second quarter profit
The contributions from trading and optimisation are expected to be 'significantly lower' for the second quarter compared with the first for segments that span oil and gas trading, London-based Shell said in a statement on Monday.
Shell's sprawling but secretive in-house trading business is often one of its biggest profit drivers, and chief executive Wael Sawan said in March that its traders haven't lost money in a single quarter over the past decade.
Shell's shares fell as much as 2.6 per cent and were trading at £25.58 (€29.63) at 8.21am in London.
The weaker contribution from trading eroded an increase in margins from refining and chemicals, although the latter division is nevertheless expected to report a loss when Shell publishes its earnings results in late July.
Oil swung wildly in the quarter, diving to a four-year low in April as US president Donald Trump unleashed his global trade war and OPEC+ boosted supply.
It then spiked last month as Israel struck targets in Iran before retreating back below $70 (€60) as tensions calmed.
Sawan has focused on cutting costs, boosting reliability and shedding underperforming assets in an effort to close a valuation gap between Shell and its US competitors.
The strategy, which includes refocusing the company on its core oil and gas business and an emphasis on shareholder returns, has helped Shell shares outperform its closest rivals this year but left it with questions hanging over its future oil production growth.
Output decreased by nearly 100,000 barrels a day from the first quarter, largely because of Shell's sale of its onshore Nigeria subsidiary and scheduled maintenance.
Shell had already notified investors of its expected production with oil and gas volumes in line with previous guidance, given in May.
Shell is the world's biggest trader of liquefied natural gas, and has forecast that global demand will grow by about 60 per cent by 2040.
Its LNG Canada project, which began its first exports in recent weeks, is one of a slew of new projects coming online globally in the next few years. Liquefaction volumes in the second quarter were in line with the first quarter.
Shell's trading update comes less than two weeks after the company announced it had no intention of making an offer for BP, in a statement that quelled months of speculation and ties its hands for the next six months under UK takeover rules.
The company is scheduled to report second-quarter results July 31st. - Bloomberg
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Irish Times
2 hours ago
- Irish Times
The Irish Times view on Paschal Donohoe's Eurogroup presidency: an important role - but don't forget the day job
Paschal Donohoe's re-election as president of the Eurogroup reflects a strong performance in the role over his previous two terms and the confidence of his euro zone colleagues Donohoe successfully campaigned for a third term and before the vote was even taken other candidates had thrown in the towel. France and Germany supported Donohoe, along with enough other ministers to give him a majority. Chairing the Eurogroup, an informal but important gathering of the 20 finance ministers from euro zone countries, is effectively an exercise in consensus-building, as countries try to move key issues forward, mostly for decision by the European Council. Reflecting the need to broker compromises between the major players, the job has never been held by one of the biggest member states – the previous incumbents were from Luxembourg, the Netherlands and Portugal. Donohoe chaired the group through the turbulence of Covid-19, the outbreak of the Ukraine war and the cost-of-living crisis, all of which inevitably took some focus off longer-term projects, such as creating a fully-functioning capital markets and banking union. These strategic developments are likely to be a key focus of Donohoe's third term. The Eurogroup also has an important role in the proposed digital euro – a project which has yet to grab the public's imagination. And it will remain a key sounding board for countries as they negotiate the fall-out from Trump's tariffs. READ MORE It is undoubtedly of value to Ireland to have a senior figure in such a central role, particularly given the access granted to the president of the Eurogroup to other vital gathering, such as those of the G7. This will, for example, have helped Donohoe plot a way for Ireland through the OECD corporate tax process, though unfortunately this deal is now in danger of collapse. That said, Donohoe also had a vital role to play at home, with tense budget negotiations ahead and uncertainty over the outlook for the public finances. He must, in other words, also continue to focus on the day job.
Irish Times
3 hours ago
- Irish Times
US may limit Aer Lingus flights because of Dublin Airport passenger cap, industry group warns
The Government may have just months to axe the 32-million-a-year cap on passengers at Dublin Airport before the US limits Aer Lingus flights to its airports, a North American industry group warns. Airlines for America (A4A), whose members include US and Canadian carriers that fly from the US to the Republic, maintains that the passenger limit on Dublin Airport breaches European Union-North American open-skies air-travel treaties. According to Keith Glatz, A4A's senior vice-president of international affairs, the US could respond to the cap by limiting Irish airlines' access to the US. Aer Lingus is the only Irish carrier offering regular scheduled transatlantic flights. Mr Glatz explained that he was not speaking for the US government, but noted that 'typically' Washington's department of transportation can respond to an illegal breach of the treaty by limiting the number of cities to which a country's airlines can fly. READ MORE He cautioned that the time left for the Irish Government to end the cap and avoid such a sanction was narrowing. 'We're talking about a couple of months to get this done, and not a year,' Mr Glatz said. The pressure from the US administration on the Government to act is likely to increase as time progresses, he predicted. [ Dublin Airport passenger cap to be breached this year, says DAA Opens in new window ] Mr Glatz stressed that A4A believed that Darragh O'Brien, Minister for Transport and the Government, wanted to keep a pledge to lift the cap and ensure the Republic complied with air-travel treaties. He also maintained that his organisation had good relationships with both Mr O'Brien and the Department of Transport. 'We're working closely with them, they're working with the US government, they're moving, but slower than we would like them to move,' he said. How the wealthy are buying up land to avoid inheritance tax Listen | 22:03 'They understand that they have to do this, and that now is the time to get this done, before a small issue becomes a larger, international dispute.' A4A believes that legislation to lift the cap is drafted, meaning that it is simply a matter of time before the Oireachtas passes it and the cap is lifted. Planners imposed the limit in 2007 as a condition of allowing airport operator, DAA, to build a second terminal at Dublin, to address fears of traffic congestion. Shortly after taking office in January, Mr O'Brien confirmed that he had sought the advice of Rossa Fanning, Attorney General, on resolving the row through legislation. The Minister subsequently predicted this would be ready by the autumn. A department spokesman said on Monday that the Minister was examining a range of issues relating to the passenger cap and was continuing to 'engage with key stakeholders'. The High Court suspended the cap's implementation when it referred questions raised in a legal challenge by airlines to the European courts. A4A is a party to that challenge, initiated by Aer Lingus and Ryanair, but Mr Glatz said that the referred issues related to European and Irish competition law, not to European Union-North American air-travel treaties. He argued that those treaties made possible the Republic's relationship with the US, worth trillions of dollars, and predicted that lifting the cap would spark further growth. Aer Lingus did not comment on any likely sanctions but the airline has consistently warned of the economic damage that it threatens.
Irish Times
4 hours ago
- Irish Times
Banks and tech keep European shares in the green
European shares closed up slightly, driven by banking and technology stocks as investors weigh up the impending US tariff deadline on Wednesday. The European Union still aims to reach a trade deal by July 9th after European Commission president Ursula von der Leyen and US President Trump had a 'good exchange' with the US trade secretary saying the US will make several trade announcements in the coming days. Dublin Despite the uncertainty, the Iseq All-Share index ended the session up 1.05 per cent at 11,439.60. In a quiet session, the index outperformed its European counterparts driven by big caps Ryanair and Bank of Ireland. READ MORE The airliner rose 2.95 per cent to €24.4 as part of a sectoral uplift which saw the industry perform well globally. Bank of Ireland led the banks in a positive day for the sector, up 2.47 per cent to €12.425, with AIB up 1.09 per cent and Permanent TSB up 0.48 to keep the sector in the green. Food stocks Glanbia and Kerry Group both ended the day in the red, down 1.78 and 0.76 per cent respectively as the two continued ongoing stock buyback programmes. London The blue-chip FTSE 100 was unchanged on the day but notched up a second weekly gain, while the domestically-focused FTSE 250 lost 0.7 per cent on Friday and ended the week lower. The midcap index had logging its largest quarterly gain in more than four years by the close of trade on Monday, but then came under pressure as U-turns on welfare reforms blew a hole in UK chancellor Rachel Reeves' budget plans. Home builder stocks led sectoral losses on Friday, dropping 2.1 per cent after MJ Gleeson warned of profit being at the lower end of market expectations for fiscal 2026 due to subdued demand. The group slumped 6.7 per cent and was the top decliner on the smallcap index. Industrial metal stocks fell, tracking lower metal prices. Anglo American, Antofagasta and Glencore slipped more than 1 per cent each. Atalya lost 3 per cent. Among individual stocks, greeting card and gifting retailer Moonpig fell 8.7 per cent to the bottom of the midcap index after a rating downgrade by Deutsche Bank. Shares of Shell dropped 2.9 per cent after the energy big said it expects quarterly earnings to be hit by weaker trading in its integrated gas division and losses at its chemicals and products operations. Europe European shares ended higher on Monday, driven by gains in technology and bank stocks at the start of a week where investors are on the lookout for any trade-related headlines in the countdown toTrump's tariff deadline. The pan-European STOXX 600 index ended 0.4 per cent higher, gaining some ground after clocking a weekly loss on Friday. On Monday, technology stocks were among the biggest boost on the STOXX, with Germany's SAP and Dutch semiconductor equipment makers ASML climbing around 2 per cent each. A gauge of euro zone lenders gained 1.6 per cent, with France's Société Générale jumping 2.8 per cent, hitting its highest level since 2017 earlier in the day. Capgemini fell 5.6 per cent after the French IT services firm agreed to buy technology outsourcing company WNS for a cash payment of $3.3 billion (€2.8 billion). New York Following a rally to all-time highs, the S&P 500 lost steam, with a gauge of megacaps down in midafternoon trading on Monday. Tesla tumbled as Elon Musk announced he's formed a new political party, digging deeper into a pursuit that's been a drag on his most valuable business. Elsewhere, copper and other industrial metals slid after Trump injected fresh uncertainty into his trade agenda with a pledge to impose a 10 per cent tariff on countries aligned with the Brics bloc of nations. Oil crept higher even after the Organisation of Petroleum Exporting Countries Plus (Opec+) decided on a bigger-than-expected production increase next month, with the group's leadership showing confidence the market can absorb the extra barrels. Shares of WNS jumped double digits following the news that French IT services firm Capgemini agreed to buy the outsourcing firm for $3.3 billion in cash. – Additional reporting, Reuters, PA.
