Early Energy Sector Optimism for Third Quarter

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Ahead of its quarterly earnings release, Shell plc (London, England) said its integrated gas business performed much better than it did in the previous quarter, while other companies are seeing a boost from recent crude oil prices.

Third-quarter earnings season is underway amid a tense global backdrop, ranging from conflicts in the Middle East and Eastern Europe, to global trade complications. Economists at the Organization of the Petroleum Exporting Countries (OPEC) said in their monthly market report for September, however, that the global economy has shown stability so far, with net economic growth forecast at 3% annually in 2025 and 3.1% for 2026.

In a preview of its third-quarter performance, Shell said its integrated gas business was expected to perform "significantly" better than in the second quarter. Guidance for the third quarter pegged production at between 910,000 to 950,000 barrels of oil equivalent per day (BOE/d), compared to 913,000 BOE/d for the second quarter.

Volumes of liquefied natural gas (LNG) also are expected to be higher, from 6.7 million metric tons per annum (MTPA) to between 7 MTPA and 7.4 MTPA for the third quarter. But despite the forecast for higher volumes, Wael Sawan, the chief executive officer of Shell, is on record expressing concern about the bevy of new LNG projects coming onstream, saying it is not economically rational.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here for a detailed look at Shell's active and proposed LNG projects worldwide.

The International Energy Agency (IEA) said it expects total LNG capacity to increase by roughly 50% by the end of the decade, potentially putting the global market in an oversupply situation. Companies that already have reached final investment decisions this year have outlined more capacity than during the five-year period ending in 2024, the agency reported.

Elsewhere, Reuters reported Monday that Exxon Mobil Corporation (Spring, Texas) said it expects third-quarter levels to show upstream earnings improve from a $100 million loss to a profit of as much as $300 million, lifted in part by stronger margins in its refinery business.

That segment is expected to show earnings for the U.S. supermajor of as much as $700 million, up $300 million from second quarter levels. That's been supported by an improvement in crude oil prices over the three-month period ending September 30.

The price for Brent crude oil, the global benchmark, was down about 0.9% over the period, averaging $68.06 per barrel. That average, however, is up about 2% from second quarter levels.

Exxon's second-quarter net earnings sank year-over-year by about 23%, or $2.1 billion, to $7.1 billion. The company is widely expected to shed about 4% of its global workforce, or about 2,000 people, before year's end.

Exxon has a majority stake in Canadian energy company Imperial Oil (Calgary, Alberta), which said earlier this month that it would shed about 20% of its workforce by 2027 as part of a broad-based restructuring process.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).