Shell's refining margins in the third quarter drop dramatically

Shell said that its refining profits fell sharply from the previous quarter to the third due to a slump in global demand. Its oil product trading earnings were also down, the company added.

Shell's trading update, released ahead of its quarter-end results on October 31, revealed that its refining margins had fallen by almost 30% in the three months leading up to the end September. They were $7.7 per barrel the previous period.

Shell has said that it expects its trading results in its Chemicals and Oil Products division to be lower than the second quarter.

In recent months, global refining margins were under pressure due to the slowdown in economic activity, particularly in China, as well as the addition of new refineries.

Shell, the largest trader in liquefied gas in the world, has also raised its LNG production guidance range for the third quarter. This was previously forecast at 6.8 to 7.4 millions metric tons.

The results of LNG trading are expected to be similar to the previous quarter.

The London-listed firm also raised its forecast for upstream oil production and gas to 1,74 million to 1,84 million barrels equivalent per day, from 1.58 to 1.78 million.

Exxon Mobil warned last week that the slump in oil prices would affect its third-quarter earnings.

The third quarter saw oil prices fall by 17%, the biggest quarterly drop in a decade, due to concerns about global demand. Brent futures settled $71.77 per barrel on the final trading day of the third quarter. (Reporting and editing by Jan Harvey; Ron Bousso)

(source: Reuters)