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Oil giant Royal Dutch Shell on Thursday reported a sharp drop in net profit for the three months to the end of June, following an unprecedented period of turmoil in the energy market and oil prices and of gas more weakly.
The Anglo-Dutch company reported adjusted earnings of $ 638 million for the second quarter of 2020. This is compared to a net profit of $ 3.5 billion over the same period a year earlier and $ 2.9 billion in the first quarter of 2020.
Analysts had warned that “Big Oil”; companies, with reference to the world’s largest energy companies, were likely to report “awful” second-quarter results as soon as lock-in measures were put in place. of coronavirus collided with an unparalleled demand shock.
The continued economic impact of the coronavirus pandemic had led Shell to announce that it was expected to pay up to $ 22 billion in the second quarter.
In a note to shareholders published on June 30, which came shortly after a similar announcement from its peer BP, Shell said it now anticipated much lower oil and gas prices in the next 30 years. .
The bleak outlook for commodity prices until 2050 followed Shell’s decision to reduce its dividend to shareholders for the first time since World War II in the first quarter of the year.
The firm’s board explained at the time that maintaining the current level of shareholder distributions was “unwise,” reducing the dividend by nearly two-thirds.
Shell now believes Brent crude futures will draw $ 35 a barrel in 2020, down from a previous $ 60 forecast for the international benchmark.
The company also lowered its Brent price forecast to $ 40 in 2021 and $ 50 in 2022, after previously saying it had expected prices to average $ 60 per year respectively.
Brent crude futures traded in the $ 43.71a barrel on Thursday morning, about 0.1% lower, while US West Texas intermediate futures were at the $ 41.22 level, down 0.15%.
Both Exxon Mobil and Chevron are expected to reveal second-quarter earnings on Friday, with UK BP ready to report on August 4th.