Shell Posts Profit Amid Industry Recovery—Energy Journal

SHELL PROFIT SOARS AS OIL SECTOR BOUNCES BACK

Royal Dutch Shell PLC on Thursday recorded a robust increase in profit for the first quarter, reports Sarah Kent.

“Shell said first-quarter profit on a current cost-of-supplies basis—a number similar to the net income that U.S. oil companies report—soared to $3.4 billion in the first three months of the year, up from $814 million for the same period in 2016. Quarter-on-quarter, the company said it saw higher earnings in all business segments,” the Journal reports.

Shell’s results are the latest in a series of positive numbers for the world’s biggest oil companies as years of cost-cutting and a modest recovery in oil prices begin to pay off.

“Last week, Exxon Mobil Corp. reported its best quarter since 2015. Chevron Corp. , France’s Total SA and BP PLC have also all reported a sharp increase in profits for the first quarter. Earlier Thursday, Norway’s Statoil AS A reported net earnings of $1.06 billion for the period, up from $611 million a year earlier,” writes Ms. Kent.

MEXICO’S PEMEX CHALKS UP SECOND STRAIGHT QUARTERLY PROFIT

Mexican state oil company Petróleos Mexicanos started the year with its second consecutive quarterly profit after several years in the red thanks to factors including higher oil prices, writes Anthony Harrup.

“Pemex’s sales in the January-March quarter rose 55% to $18.5 billion, while operating profit more than doubled to $3.9 billion. Net profit was $4.7 billion, compared with a net loss of $3.6 billion a year before. Hefty exchange gains this year were partly offset by higher payments of duties and taxes,” the Journal reports.

The firm’s results were also helped along by cost reductions and exchange gains from a stronger Mexican peso.

It was the first time in almost six years that Pemex has strung together two quarters of net profit, chief financial officer Juan Pablo Newman said in a conference with analysts.

BRITISH OIL AND GAS INDUSTRY COULD FACE $646 MILLION BREXIT BILL

The U.K.’s decision to leave the European Union could cost Britain’s oil and gas companies an extra $646 million a year, industry group Oil & Gas U.K. warned.

“If Britain fails to agree on an exit deal with the E.U., causing it to fall back on World Trade Organization rules, the likely annual cost of trade to the industry will almost double to around GBP1.1 billion,” writes Philip Waller.

The lobby group said it was essential for the British government to ensure the sector’s access to the EU’s markets and labor, as well as maintain the U.K.’s influence in Europe .

MARKETS

Crude futures pulled back on Thursday as investors focused on U.S. inventories falling less than expected, deepening skepticism that production cuts from the Organization of the Petroleum Exporting Countries aren’t making a big enough dent in elevated global stockpiles.

Brent crude, the global oil benchmark, fell 0.6% to $50.48 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.7% at $47.49 a barrel.

Government data showed a modest decline for U.S. crude inventories and another unexpected increase in gasoline supplies as hopes about summer gas demand are frail. Over the last four weeks, sales fell 2.7% from a year earlier.