Shell said on Tuesday that trading & optimisation earnings in its integrated gas division are expected to be “significantly” higher in the second quarter as it lifted its production guidance for the segment.
The oil giant expects Q2 production of 610,000 to 650,000 barrels of oil equivalent per day in its integrated gas arm, down from 909,000 boed in the first quarter due to the impact of the Middle East conflict on Qatari volumes. However, this was above its previous forecast for production of 580,000 to 640,000 boed in Q2.
Production at Shell’s Pearl gas-to-liquids facility in Qatar was halted in March following an attack on the Ras Laffan Industrial City.
Shell said trading results at its chemicals and products unit, which includes the oil trading desk, are set to be in line with the first quarter.
The company also said on Tuesday that it expects an improvement in its working capital position due to the impact of “unprecedented volatility” in commodity prices. It now expects a cash inflow of $1bn to $6bn in the second quarter, following an $11.2bn outflow in the first quarter.
At 0953 BST, the shares were up 3.1% at 3,002.74p.
Dan Coatsworth, head of markets at AJ Bell, said: “There was a sense of relief at Shell after it said second quarter integrated gas production would be better than previously expected. The news was part of a Q2 teaser, helping to guide the market before the full numbers are released.
“The update coincided with a pick-up in oil prices, with Brent crude rising 1.4% to $73 in a sign that the market isn’t entirely convinced the US-Iran peace deal is set in stone.
“Shipping activity is picking up through the Strait of Hormuz, but safe passage is not guaranteed.”