Shell raises gas output forecast and sees higher refining margins

Shell raised its forecast for third-quarter integrated gas production and expects refining margins to rise sharply, according to a market update issued Wednesday. The company forecast gas production of 740,000 to 780,000 barrels of oil equivalent per day for July through September, and an indicative refining margin of $42 per barrel. The gas forecast is above Shell’s previous range of 570,000 to 630,000 barrels of oil equivalent per day and the 631,000 barrels per day it reported for the second quarter. Shell said the third-quarter outlook includes production from its acquisition of Canadian energy company ARC Resources, completed in early September. The available information does not quantify how much of the higher forecast comes from the acquisition. The projected refining margin compares with $24 per barrel in the second quarter. Refining margins measure the difference between the cost of crude oil and the market value of products made from it, such as diesel and gasoline. The figures are forecasts, not final third-quarter results. Shell also forecast third-quarter liquefied natural gas production of 7.2 million to 7.6 million metric tons.