Shell’s profits hit record $11.5bn, as UK households face winter energy bill pain

From 1h ago 02. 28 Introduction: Shell reports record profit of $11. 5 billion Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

Oil giant Shell has doubled its profits in the last quarter, thanks to the surge in energy prices since the Ukraine war began which are hammering households and businesses. Shell has reported record adjusted earnings of $11. 47bn (£9.

4bn) for the last quarter, up from $5. 5bn in April-June 2021, as it benefitted from higher realised prices, higher refining margins, and stronger gas and power trading. That smashes Shell’s record quarterly profit of $9.

1bn racked up in January-March , and above analyst forecasts. Shell says it made a “strong performance in a turbulent economic environment”. Shell’s chief executive officer, Ben van Beurden , says: .

css-knbk2a{height:1em;width:1. 5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “With volatile energy markets and the ongoing need for action to tackle climate change, 2022 continues to present huge challenges for consumers, governments, and companies alike. Consequently, we are using our financial strength to invest in secure energy supplies which the world needs today, taking real, bold steps to cut carbon emissions, and transforming our company for a low-carbon energy future.

But the company will also funnel more cash to investors, announcing a share buyback programme of $6bn in the third quarter. Shell’s profits hit a new all-time high of $11. 5 billion in the second quarter, more than double the same period a year earlier.

It’s using the cash to launch a $6 billion share buyback — Emily Gosden (@emilygosden) July 28, 2022 And with gas prices at their highest level since the Ukraine war began, the UK’s energy price cap could hit £3,850 per year in January. Benchmark wholesale natural gas prices for Britain and the Netherlands, the ICIS NBP and ICIS TTF, have rallied as Russia’s Gazprom has cut flows via Nord Stream to 20% capacity. The Dutch price is up more than 10x the average in 2019.

@ICISOfficial #NBP #TTF #natgas pic. twitter. com/aWbUEo97zk — Tom Marzec-Manser (@tmarzecmanser) July 27, 2022 BFY Group, a utilities consultancy, warns that more vulnerable households, on prepayment meters, could see energy bills of £500 for the month of January alone.

Consumers were also warned that annual charges of more than £3,500 a year, or £300 a month, could become the norm “well into 2024”. This is really, really bad. Still don’t think people are grasping how bad.

£300-a-month average energy bills until “well into” 2024 is a disaster. https://t. co/lCbKfp7Lav — Rob Davies (@ByRobDavies) July 27, 2022 The grim forecasts came a day after MPs said millions of people would fall into “unmanageable debt” without more government help to pay bills, following a surge in wholesale gas prices to near-record levels.

Thursday’s Guardian: “Unions issue general strike threat as rail crisis grows” #BBCPapers #TomorrowsPapersToday https://t. co/7FuHsAa3Vz pic. twitter.

com/dXbts1E39M — BBC News (UK) (@BBCNews) July 27, 2022 Thursday’s front page: SHOCKING #TomorrowsPapersToday https://t. co/nsA0CXJEiW pic. twitter.

com/txUYNSSfE3 — The Mirror (@DailyMirror) July 27, 2022 Also coming up today We find out today if the world’s largest economy is shrinking. when US GDP for the second quarter is released. Some analysts predict US economic activity fell for the second quarter in a row, which would be a technical recession.

On July 27, the #GDPNow model nowcast of real GDP growth in Q22022 is -1. 2%. https://t.

co/T7FoDdgYos #ATLFedResearch Download our EconomyNow app or go to our website for the latest GDPNow nowcast. https://t. co/NOSwMl7Jms pic.

twitter. com/oMg171agqi — Atlanta Fed (@AtlantaFed) July 27, 2022 European stock markets are expected to rise, despite the US central bank announcing another hefty interest rate rise last night. The Federal Reserve made its second 0.

75 percentage-point rise in a row, as it rattles through its most aggressive cycle of monetary tightening since 1981, but it also suggested it could slow the pace of increases, if inflation eases. Fed announces another three-quarter-point increase in interest rates Read more The agenda 9. 30am BST: Weekly UK economic and business activity data 10am BST: Eurozone economic, business and consumer confidence report 1pm BST: German inflation rate for July 1.

30pm BST: US Q2 GDP report 1. 30pm BST: US weekly jobless Updated at 02. 29 EDT Key events 19m ago Shell’s refining profit margins triple 1h ago Introduction: Shell reports record profit of $11.

5 billion Filters BETA Key events ( 2 ) Shell ( 6 ) UK ( 2 ) US ( 2 ) Ben van Beurden ( 1 ) BFY Group ( 1 ) 13m ago 03. 15 Here’s some early analysis of Shell’s results , from Stuart Lamont, investment manager at Brewin Dolphin: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} “The strong oil price backdrop has helped Shell deliver a blockbuster set of results. The dividend may have remained the same, but the share buyback programme is positive news for shareholders. Many investors questioned the well-known ‘never sell Shell’ mantra during the worst of the pandemic and the company’s subsequent dividend cut, but with a path to net zero and attractive returns Shell is in a strong position – albeit, political risk remains high as elevated energy costs hit households.

” 15m ago 03. 13 Shares in Shell have risen almost 1% in early trading, to a three-week high, after it beat profit forecasts. So far this year, Shell’s shares have surged over 30%.

Shell’s share price this year Photograph: Refinitiv 19m ago 03. 10 Shell’s refining profit margins triple Shell’s refining profit margins almost tripled in the last quarter, to $28 per barrel of oil. That’s up from a refining margin of $10 per barrel in the first three months of this year.

Shell says these higher refining margins reflect “the dislocation in product markets, particularly middle distillates”. Middle distillates are refined from crude oil, and include heating oil, diesel and jet fuel. Fuel retailers have blamed profiteering by refining companies for the record prices on forecourts this year.

And earlier this month, the UK’s competition watchdog raised concerns over the margins made by refineries. Petrol prices: UK watchdog raises concerns over refinery margins Read more Here’s Reuters take on Shell’s results: . css-knbk2a{height:1em;width:1.

5em;margin-right:3px;vertical-align:baseline;fill:#C70000;} Refining profit margins tripled in the quarter to $28 per barrel. They have weakened substantially in recent weeks amid signs of easing gasoline demand in the United States and Asia. Shell said its refinery utilization would increase to 90-98% in the third quarter, compared with 84% in the second quarter.

30m ago 02. 59 Shell’s integrated gas division made adjusted earnings of $3. 75bn in the last quarter, more than double the $1.

6bn in Q2 2021. That’s slightly lower than the January-March quarter, when the division – which includes liquefied natural gas (LNG) – made $4bn. Shell says gas earnings this year were boosted by “higher realised prices and higher trading and optimisation results”.

38m ago 02. 50 Shell says it distributed a total of $7. 4bn to its shareholders in the last quarter.

It will pay a dividend of $0. 25 per share for Q2, which will be worth around $1. 8bn to its investors, I think.

But it has also conducted an $8. 5bn share buyback programme during 2022 (which pushes up its share price), and will conduct a new $6bn programme this quarter. Given the current energy sector outlook, Shell says, shareholder distributions are expected to remain “in excess of 30% of cash flow from operating activities”.

1h ago 02. 28 Introduction: Shell reports record profit of $11. 5 billion Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.