Shell has released a precursor to their Q4 results reflecting ongoing benefits of higher oil prices due to geopolitics, and the negative impact of windfall taxes.
“In its usual teaser of quarterly results Shell has a classic good news/bad news combination to offer shareholders,” said Russ Mould, investment director at AJ Bell.
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“First the good news: the company’s large liquefied natural gas business is expected to have delivered a very strong performance despite lower output on plant outages. This demonstrates just how robust LNG pricing is right now as countries scramble to replace Russian gas.”
“Now for the bad news: lower oil prices will hit the oil products part of the business and Shell has quantified the material impact of freshly introduced windfall taxes in the UK and Europe – which are now expected to run into the billions.”
Shell said new EU and UK levies on profits from hydrocarbon production would cost them around $2 billion.
Nevertheless, Shell shares rose on stronger LNG trading and positive refining margins which are expected to increase to $19 per barrel in Q4, up from $15 per barrel in Q3.
The invasion of Ukraine by Russia has lifted profits at Shell and the oil major on course for record earnings in 2022.
Shell shares were trading at 2,338p, up 1.1%, at the time of writing.
