Shell released their Q2 earnings and production teaser on Friday and signalled lower production and prices are likely to lead to lower earnings in the second quarter.
Shell’s teaser is brief but provides an insight into their production forecasts and where they see earnings heading.
The main takeaways are maintenance across their upstream business will result in lower production while their gas and trading businesses are set for lower earnings.
Shell shares were 0.2% weaker at the time of writing.
“Shell has trailed its second quarter results and the good news is there may be a little less ammunition for advocates of harsher windfall taxes. The bad news is this is because its results are likely to be somewhat less impressive than they have been in recent quarters,” said Russ Mould, investment director at AJ Bell.
“How much the drop in earnings from its natural gas trading operation is a function of what Shell describes as ‘seasonality’ in the market, and how much it is just cyclical weakness linked to a softening economy is an open question. Investors appear to be sitting on their hands rather than coming down on one side or another judging by this morning’s share price reaction.
“The company also expects the numbers to be marred by field maintenance which will limit production. Even considering a record first quarter of the year Shell has fallen behind its US peers and there is a danger a weak showing could undermine it further.”
Shell will release their full Q2 results on 27th July.