Shell posts earnings of $3.5 billion in 2016; an 8% slide from $3.8 billion in 2015

Shell posts earnings of $3.5 billion in 2016; an 8% slide from $3.8 billion in 2015

Oil major Royal Dutch Shell posted fourth-quarter earnings of $1.0 billion, compared with $1.8 billion for the same quarter a year ago, and recorded its worst annual profit for more than a decade as low oil prices continue to weigh on the industry.Ben van Beurden, chief executive officer of Royal Dutch Shell, said that such earnings figures do not “look good” for investors but he is “very pleased” with the performance for the full year as the company completed its merger with gas utility BG. Shares were 1.5% higher in early trade on Thursday.Shell took over BG Group in 2016 in a $52 billion deal that created the world’s largest trader of liquefied natural gas.Van Beurden said that market conditions and the internal adjustments in the company led to the lower-than-expected earnings. An expected charge of $430 million at its integrated gas division, which related to the impact of the weakening Australian dollar, also had an impact on earnings.”We are reshaping Shell and delivered a good cash flow performance this quarter with over $9 billion in cash flow from operations. Debt has been reduced and, for the second consecutive quarter, free cash flow more than covered our cash dividend,” van Beurden said in the report.Using the current cost of supplies (CCS) earnings attributable to shareholders figure, a key metric used to gauge earnings for oil majors, the oil giant said full-year earnings came in at $3.5 billion, compared with $3.8 billion in 2015. Dow Jones reported that annual profits had slipped to their lowest level in more than ten years.Cash flow from operating activities for the fourth quarter of 2016 was $9.2 billion, which included negative working capital movements of $0.6 billion. A year ago, cash flow had stood at $5.4 billion, which included favorable working capital movements of $1.6 billion.

Source: LNG Global

 

WTI crude oil and natural gas forecast

The WTI Crude Oil market initially fell during the session on Tuesday, and then broke higher and reached towards the $53.50 level which of course was resistant. Because of this, I believe that the back and forth type of choppiness will continue going forward. The market continues to see buying and selling, as the market overall is trying to figure out whether the oversupply issue is going to take over the production cuts. The $55 level above continues to be resistive, while the $50 level below continues to be support as soon as we breakout of the range, then we can start placing longer-term trades. Currently, this is short-term scalping going forward and I don’t think there is much else you can do.

The natural gas markets broke down on Tuesday, January 31 reaching towards the $3.10 level. That’s an area where there is a significant amount of support, but I think that we are going to break down below the bottom of the range for the session, reaching towards the $3 level. A rally from here will face quite a significant amount of resistance near the $3.25 level. That’s an area where expect sellers a step back in, and give us an opportunity to start shorting on exhaustive candles.Ultimately, I believe that the $3 level underneath will be broken as well, as the warmer temperatures in the northeastern part of the US continue to weigh upon natural gas, as well as the oversupply that we have in both the United States and Canada. I believe longer-term we may be able to reach all the way down to the $2.55 level again, and that every time we rally it’s likely that sellers will return on signs of exhaustion, as the market looks a very heavy now, and the sellers will be interested in jumping in every time to get an opportunity.

https://www.dailyforex.com/forex-technical-analysis/2017/02/wti-crude-oil-and-natural-gas-forecast-february-1-2017/71354