Major Decline in Shell’s Gas Trading Earnings

Major Decline in Shell's Gas Trading Income

Shell Plc (SHEL), one of the world’s largest oil companies, has announced that its earnings from natural gas trading will experience a significant decline in the second quarter of the year. The anticipated decrease is attributed to seasonal shifts in the market. Additionally, Shell Stock expects a decline in oil and gas production compared to the first quarter due to field maintenance, while its chemicals business is projected to report a loss. These updates were provided ahead of the company’s full results release later this month.

 

Challenging Second Quarter for Trading Division

Trading played a crucial role in Shell’s impressive financial performance last year, especially with the volatility observed in European natural gas prices. However, the conditions were less favorable in the second quarter. Shell stated that earnings from its trading unit are expected to be considerably lower compared to a strong first quarter due to seasonality and fewer optimization opportunities.

 

Shell PLC Stock Forecast

According to 13 analysts, the average target price for Shell PLC ADR stock is forecasted to be USD 71.67 in the next 12 months. The analyst ratings to given Shell PLC ADR are of Strong Buy. However, Stock Target Advisor’s own analysis of Shell PLC ADR suggests a Slightly Bearish outlook, considering 5 positive signals and 8 negative signals. As of the last closing, the stock price of Shell PLC ADR stood at USD 58.53. Over the past week, the stock price has decreased by -2.21%, while it has increased by +1.44% over the past month and +21.91% over the last year.

SHEL Ratings by Stock Target Advisor

Trading Unit’s Significance to Shell’s Profitability

Shell has recently revealed that its trading unit contributes up to a quarter of the company’s profitability. This insight offers a deeper understanding of the importance of the trading business within the company’s overall operations. By disclosing this information, Shell aims to provide investors and analysts with a clearer picture of the company’s financial landscape.

 

Competition from US Major Exxon Mobil Corp.

Shell’s US counterpart, Exxon Mobil Corp., has also shared insights into its second-quarter earnings. Exxon Mobil expects a reduction of approximately $4 billion compared to the first three months of the year due to lower natural gas prices and oil-refining margins. In an effort to compete with European majors like Shell, the American oil major is actively working to strengthen its trading business.

 

Exxon Mobil Corp Stock Forecast

According to the projections of 23 analysts, the average target price for Exxon Mobil Corp’s stock in the next 12 months is estimated to be USD 127.97. The overall analyst rating for Exxon Mobil Corp is Buy. Stock Target Advisor’s independent analysis of the company suggests a Neutral stance, considering 8 positive signals and 7 negative signals. As of the latest closing, Exxon Mobil Corp’s stock price stood at USD 102.92. Over the past week, the stock price has decreased by -3.54%, while over the past month, it has declined by -3.04%. However, when considering the last year, the stock price has shown a significant increase of +23.58%.

XOM Ratings by Stock Target Advisor

Outlook for Shell

Despite the anticipated decline in earnings from natural gas trading and the challenges faced by its chemicals business, Shell remains a significant player in the oil and gas industry. The company’s diverse portfolio, including its trading unit, provides a foundation for its operations. Investors and analysts will eagerly await the release of Shell’s full results later this month to gain a comprehensive understanding of the company’s financial performance in the second quarter of the year.

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