Shell sees weaker gas trading, refining smacking Q3 results

Oct. 06, 2022 8:57 AM ETShell plc (SHEL)By: Carl Surran, SA News Editor38 Comments

Shell Holds Annual General Meeting In London

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Shell (NYSE:SHEL) -5.4% pre-market Thursday after warning it expects "significantly lower" Q3 profit in its integrated gas trading business from Q2 levels, citing "seasonality and substantial differences between paper and physical realization in a volatile and dislocated market," as well as a sharp drop in refining margins.

In an update of its Q3 outlook ahead of full results scheduled for October 27, Shell (SHEL) said it sees Integrated Gas production of 890K-940K boe/day for the quarter, and it expects a Q3 pre-tax depreciation of $1.3B-$1.7B.

Shell (SHEL) said indicative margins for chemicals plunged to a negative $27/metric ton from a positive $86/ton in Q2 as demand for plastic dropped, and indicative refining margins fell to $15/bbl in Q2 from $28/bbl in the prior quarter.

The company expects the combined impact would hit Q3 adjusted earnings by $1.3B-$2B, much worse than consensus estimates for a $400M drop.

Shell (SHEL) has "massive potential over the next few years, supported by its dedication to being net-zero by 2050," Growth And Value Trading writes in an analysis published recently on Seeking Alpha.

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