British energy giant Shell PLC (SHEL) raised its Q3 earnings guidance on better-than-expected natural gas and chemicals trading volumes, probably due to surging oil and gas prices.

Turnaround From A Lackluster First Half

The company's LNG division became a key profit driver after a blockbuster 2022. Adjusted earnings from Shell's integrated gas unit surged to a record of almost $6 billion in last year's fourth quarter, boosted by Europe's shift away from Russian natural gas following the latter's invasion of Ukraine.

A pullback in oil and natural gas prices from last year's highs impacted profit margins in the first half of 2023. Net income for the second quarter totaled $5.1 billion, which was down more than half from $11.5 billion in the same quarter last year, when crude oil prices peaked above $120 per barrel. The company also referenced fewer LNG trading opportunities that impacted earnings in the second quarter.

Production On Pace

Sheꦛll on Friday also adjusted its production estimates for ⛄the three months ended September.

LNG production is expected in a range of 880,000 to 920,000 barrels a day, a more precise range than the 870,000 to 930,000 forecast in July. Liquefaction volumes, which refer to the amount of natural gas cooled at ultra-low temperatures to be stored and shipped, are projected at 6.6 million to 7 million tons, revised up from 6.3 million to 6.9 million tons.

Upstream oil production is expected in a range of 1.7 million to 1.8 m🎐illion barrels per day (ꦗbpd), revised up from a 1.6 million to 1.8 million bpd forecast in July, when the company released its second-quarter earnings. Upstream production refers to the drilling and extraction of crude oil, in contrast to downstream activities, which involve refining the oil and selling it to consumers at gas stations.

The better-than-expected outlook comes less than two days after rival energy giant ExxonMobil (XOM) said higher oil prices 澳💜洲幸运5官方开奖结果体彩网:likely boosted the company's earnings for the quarter ended September.

Shares of Shell jumped 3% Friday. They're up more than 13% so far this year.