LONDON (Reuters) -Shell refining margins fell sharply in the third quarter compared to the previous three months. Global demand has significantly sagged, impacting profitability. Additionally, oil product trading earnings also weakened during this period. #ShellRefiningMargins
In a trading update before its quarterly results on October 31, Shell reported a nearly 30% drop in refining margins. The indicative refining margins fell to $5.5 a barrel from $7.7 a barrel in the previous period.
Trading results for its chemicals and oil products division were expected to be lower than in the second quarter, Shell said.
Global refining margins faced pressure in recent months due to slowing economic activity, especially in China. Additionally, new refineries came online, contributing to the downturn.
Shell, the world’s largest trader of liquefied natural gas, also lifted its LNG production guidance for the quarter to a range of 7.3 million to 7.7 million metric tons for the quarter from a previous forecast of 6.8 million to 7.4 million tons.
LNG trading results were set to be in line with the previous quarter.
The London-listed company also lifted its upstream oil and gas production outlook for the quarter to 1.74 million to 1.84 million barrels of oil equivalent per day from 1.58 million to 1.78 million boed.
Last week, Exxon Mobil warned that a slump in oil prices was set to hit its third-quarter results.
Oil prices fell by 17% in the third quarter, the largest quarterly decline in a year, on worries about the global oil demand outlook. Brent futures settled at $71.77 a barrel on the last trading day of the quarter. #ShellRefiningMargins
Navigating Challenges: The Future of Shell’s Refining Margins Amidst Market Shifts
Moreover, the global energy landscape is shifting, impacting Shell’s profitability. With rising competition and regulatory changes, the company must navigate these challenges effectively. As a result, Shell refining margins may continue to fluctuate in the coming quarters, requiring careful management and innovation.
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