Shell expects refining margins to nearly double in third quarter

Summarised from 4 outlets · 5 reports · Updated 7 Oct, 09:44 · Archive

Shell forecast refining profit margins of $42 per barrel for the third quarter, nearly double the previous quarter's $24.

Shell announced on Wednesday that it expects refining profit margins to leap to $42 per barrel in the third quarter, nearly double the $24 per barrel recorded in the previous three months. The margin—the difference between the cost of crude oil and the market value of finished fuels—reflects surging global fuel prices driven by supply shortages.

The company also upgraded its gas production forecast for the third quarter to between 740,000 and 780,000 barrels of oil equivalent per day, higher than the 570,000 to 630,000 BOED it previously expected. The improvement follows the completion of Shell's acquisition of Canadian energy firm ARC Resources in early September.

Global fuel supplies have been squeezed by disruptions to crude oil flowing through the Strait of Hormuz and the shutdown of refineries damaged in the Middle East conflict. Shell and other energy companies have been running their plants at high levels of utilisation to produce fuels such as diesel and jet fuel amid these constrained supplies. The Guardian reports that the $42 margin represents a record high, exceeding the previous peak of about $28 in mid-2022.

Shell will release its full third-quarter results at the end of October. Garry White, chief investment commentator at Raymond James, said the company appeared set for another strong earnings beat when those figures are published.

How it is being reported

• Shell refineries forecast to make double the profit from every barrel of fuelRecord prices caused by global shortages amid shutdown of war-damaged refineries in Middle East and Russia Shell’s refineries are expected to make almost double the profit from every barrel of fuel produced owing to record prices caused by shortages around the world. In a market trading update on Wednesday, the energy supermajor forecast profit margins of $42 a barrel in the July to September period, far above the $24 a barrel of the second quarter and the previous high of about $28 in mid-2022. Continue reading...The Guardian · 7 Oct, 09:30
• Shell set for another bumper quarter as traders cash in on surging energy pricesA squeeze on global fuel supplies has driven oil giant Shell's refining margins to a record high.This is Money · 7 Oct, 08:58
• Shell upgrades gas production outlook and says refining profit margins to growShell said it was forecasting higher integrated gas production between July and September than previous guidance.Independent Business · 7 Oct, 08:31
• Shell upgrades gas production outlook and says refining profit margins to growShell said it was forecasting higher integrated gas production between July and September than previous guidance.Independent Business · 7 Oct, 07:50
• Shell eyes profit windfall from surging fuel pricesShell is poised to reap major gains from its refining operations after the global surge in fuel prices dramatically ramped up the group’s profit margins. The blue-chip energy giant said on Wednesday it expects its indicative refining margin – the difference between the cost of crude oil and the market value of finished fuels like [...]City AM · 7 Oct, 07:33

In this story: Shell · ARC Resources · Strait of Hormuz · Middle East · Russia · Qatar · Canada

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