Shell's profits double as crude oil prices rise

Click to follow
OIL GIANT Royal Dutch Shell yesterday reported a doubling of its third-quarter profits as benefits from rising crude oil prices and a corporate revamp began to emerge.

The Anglo-Dutch group said that its adjusted cost earnings surged to $1.808bn (pounds 1.13bn) between July and September from $841m during the same three months last year.

The figure excludes the effect of special charges and the changing value of Shell's oil stocks.

Reported net income for the quarter was also up strongly at $2.37bn from $896m last year.

Shell said that the rises were mainly due to higher crude prices, which rose from $17 a barrel in July to more than $23 in September.

The rises in oil tariffs reflected the high level of compliance with production constraints agreed by the world's major oil producers in March, the company said.

"Overall demand continues to grow, driven by the recovery in certain Asia-Pacific countries and the continuing strength of the US economy," Shell added.

"This, together with the effects of winter in the northern hemisphere, should form the basis for continuing oil price strength in the next few months."

But Shell warned that its profit margins were expected to remain under pressure in Europe and the US Gulf Coast until the traditional high winter demand helped use up some of its excess stocks.

Margin prospects also looked weak in the Asia-Pacific region due to a rise in surplus capacity there.

Shell said that progress towards its $2.5bn cost improvement plan, announced late last year, was continuing, and described its financial position as strong.