Shell shares down 4% steering FTSE 100 into losses
Shell is warning that its natural gas trading and refining divisions are under stress and will negatively affect the company's third quarter release on 27 October.
Video Transcript
Shell shares drop, steering FTSE 100 down
There's been a hefty decline in Shell shares at the open today in the London markets.
The London-listed FTSE 100 oil giant has seen its stock down almost 4% as a result of a profit warning that's come through today. The group warned that its third quarter (Q3) profits will be weakened by a sharp drop in refining margins and significantly weaker earnings from its natural gas trading unit.
Shell share price chart
Let's take a look at the share price chart because we have what is overall still a continuation of this up move here.
Shell obviously benefits from a large amount of exposure to the energy sector, a sector which is showing enormous price gains. So we have seen this uplifting show along with the rest of the oil sector.
But you can see if we look in here, this is a drop we've seen in today's session, with the stock, as I said, down almost 4% on the trading day today. And this stock is so big, it is also steering the FTSE into losses in the earlier part of the session today. Indicative refining margins have dropped to $15 a barrel in the quarter, compared with $28 a barrel in the previous three months.
You can see a really big hit to the bottom line here from the refining numbers. We'll get some more details on October the 27th when the company comes through with earnings.
You'll remember as well yesterday the Shell chief executive calling on the government to tax oil and gas companies more in order to protect the poorest people in society from soaring energy costs. That's not really anything to do with today's trade. That was yesterday. I mean in fact we saw Shell yesterday close at levels we've not seen since the 10th of June.
And in fact, if you look at the continuation of this upward move here, if we get a break of the highs we saw back on the 9th of June, we're then trading at levels not seen in a couple of years or so.
So, Shell on the way down in today's trade, the up move is in the long-term and is still in place, but the company warned about the outlook for earnings and also considering this idea that the CEO wanted oil companies to have more of a tax burden which could ultimately end up with a further indication of potential losses ahead.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
