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Shell cautious on oil prices after flat Q1

Thursday 01 May 1997 18:02 EDT
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The Anglo-Dutch oil giant Royal Dutch Shell yesterday painted a cautious picture on oil prices and refining margins as it reported a flat set of first-quarter profit figures, writes Michael Harrison.

Current cost net income for the period was pounds 1.54bn against pounds 1.53bn last year while net income showed a 19 per cent drop from pounds 1.7bn in the first quarter of 1996 to pounds 1.4bn. The shares fell 8p to 1072p. Shell warned that the steady fall in oil prices since the start of the year was set to continue, exacerbated by an excess of production over demand. "Crude prices may show further weakness. Refining margins are also expected to remain under pressure," the company said.

The group also pointed to the strength of sterling, which had the effect of masking an underlying 7 per cent increase in earnings in dollar terms. The average oil price in the first quarter was $21.2 a barrel - $2.60 a barrel higher than a year ago.

Shell's exploration and production earnings for the quarter were the second highest on record at pounds 996m.

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