Weaker refining and gas trading will hit Shell’s third-quarter results

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LONDON — Shell said on Thursday that its third-quarter profits would come under pressure from a nearly halving in oil refining margins, erosion of chemical margins and weaker Natural gas trade.

The British energy giant posted two consecutive quarters of record profits in the first half of the year amid a surge in oil and gas prices, and the stellar earnings of its trade operations, the largest in the world.

But in the third trimester, indicative refining margins fell to $15 a barrel from $28 a barrel in the previous three months, Shell said in an update ahead of its results on October 27, amid growing concerns about a global economic slowdown.

And indicative margins for chemicals fell to $27 per ton from $86 in the second quarter after global demand for plastics plummeted.

The fall in refining margins will negatively impact between $1 billion and $1.4 billion on segment adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), Shell said.

shells third quarter liquefied natural gas (LNG) and gas trade results are expected to be “significantly lower” due to weaker seasonal demand as well as “substantial differences between paper and physical realization in a volatile and dislocated market.”

Oil trade should be in line with the previous quarter.

U.S. rival Exxon Mobil reported strong third-quarter operating profits on Tuesday as profits from natural resources gas gap weaker refining and chemicals.

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