Shell shares dip after signalling impairment costs

Shell shares were lower on Monday after the oil gaint signaled up to $4.5bn in impairment costs due to the write down refining assets and lower energy prices weighs on profit.

The oil major released its earnings teaser amid falling oil prices on Monday after Saudi Arabia said it was cutting prices.

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Shell shares were down 1.8% at the time of writing.

“The usual teaser for Shell’s quarterly results did little to enthuse investors as Saudi Arabia’s decision to cut crude prices dampened sentiment towards the sector,” said AJ Bell’s Russ Mould.

“If it wasn’t for the threat of disruption to supplies thanks to tensions in the Middle East, one might have expected crude prices to come under sustained pressure as inventories and production build and signs of demand weakness emerge.

“At least Shell can lean on its big integrated gas arm. Though news its performance improved in the fourth quarter – when many of the world’s big consumers of natural gas are facing seasonally cold temperatures – hardly feels like a big revelation.”

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Integrated gas was a bright spot in an otherwise run of the mill update that will do little to encourgage investors, especially with energy prices languishing despite efforts by OPEC+ to support oil prices.

“A weak performance for its chemicals division is compounded by the big writedown associated with a Singapore refining hub it is looking to sell,” Russ Mould said.

“Shell has been a beneficiary of higher commodity prices over the approximate two years which have followed Russia’s invasion of Ukraine. The company needs to show it can deliver when market conditions aren’t so helpful.

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