Shell boosted by higher oil and gas prices

City A.M. Reporter
Royal Dutch Shell beat all analyst forecasts by reporting an 18 per cent jump in third-quarter profits yesterdy thanks to higher oil and gas prices, setting a trend for the sector.

Europe’s largest oil company by market value said current cost of supply (CCS) net income was $3.52bn (£2.2bn) in the period.

Stripping out non-cash charges and one-off items, the result soared 88 per cent to $4.93bn, well ahead of an average forecast of $4.29bn.

Shell was helped by a 12 per cent rise in crude prices compared to the third quarter of 2009, while US natural gas prices were 29 per cent higher and UK gas prices doubled. Average global refining margins also rose.

Shell also contributed to its rebound, with a five per cent rise in oil and gas production in the quarter compared to the same period of 2009, to 3.1m barrels of oil equivalent per day (boepd), just ahead of forecasts. However, the main outperformance versus expectations was in Shell’s refining unit, where underlying profits were around 50 per cent higher than analysts predicted.