(Alliance News) - Royal Dutch Shell said Wednesday it expects third-quarter production to be between 820,000 and 860,000 barrels of oil equivalent per day, while sales volumes are expected in a range between 4 million and 5 million barrels per day.
The Anglo-Dutch oil and gas company sees upstream output in a range between 2.15 million to 2.25 million barrels of oil per day. Akin to the second quarter, the Upstream unit's adjusted earnings are expected to show a loss.
Shell said it expects to make job reductions of 7,000 to 9,000 by the end of 2022 following the plunge in oil demand. The "reduced organisational complexity" along with other measures, Shell said, are expected to deliver sustainable annual cost savings of between USD2.0 to USD2.5 billion by 2022.
In addition, the oil major expects a post-tax impairment charge in the range of USD1.0 billion to USD1.5 billion for the third quarter.
Shell A shares were up 0.2% early Wednesday in London.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: down 0.3% at 5,879.28
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Hang Seng: up 0.8% at 23,470.13
Nikkei 225: closed down 1.5% at 23,185.12
DJIA: closed down 131.40 points, 0.5%, at 27,452.66
S&P 500: closed down 16.13 points, 0.5%, at 3,335.47
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GBP: down at USD1.2840 (USD1.2859)
EUR: down at USD1.1730 (USD1.1741)
Gold: down at USD1,887.40 per ounce (USD1,892.11)
Oil (Brent): flat at USD41.17 a barrel (USD41.08)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Wednesday's Key Economic Events still to come
0930 CEST EU EuroCOIN indicator of euro area economic activity
0955 CEST Germany unemployment
1100 CEST EU flash estimate euro area inflation
0700 EDT US MBA weekly mortgage applications survey
0815 EDT US ADP national employment report
0830 EDT US 3rd estimate gross domestic product
0945 EDT US ISM-Chicago business survey - Chicago PMI
1000 EDT US pending home sales index
1030 EDT US EIA weekly petroleum status report
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The prime minister will lead a Covid-19 briefing later Wednesday after the UK recorded the highest number of daily coronavirus cases since the outbreak began. Boris Johnson will be joined at a Downing Street press conference by chief medical officer for England Chris Whitty and chief scientific adviser Patrick Vallance in what will be the 100th coronavirus briefing since the pandemic hit the UK. The last time the three men appeared together at the podiums was September 9 when Johnson outlined the "rule of six" and urged people to limit their social contact "as much as possible". But three weeks on, the number of cases has risen, and The Times is reporting that a final decision will come on Wednesday on whether Merseyside will join the North East with tougher lockdown measures banning households mixing indoors.
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The UK economy's second-quarter slump was not as bad as first estimated, according to the latest figures from the Office for National Statistics. On an annual basis, UK gross domestic product fell by a revised 21.5% in the three months to June, having contracted 1.7% in the first quarter of 2020. The second-quarter reading was revised to a slightly smaller annual decline from the original estimate of 21.7%. On a quarterly basis, UK GDP shrank by 19.8%, revised from the initial estimate of a 20.4% fall, having contracted 2.2% in the first three months of 2020. The ONS said this was the largest quarterly contraction in the UK economy since quarterly records began in 1955.
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The ONS also said the UK current account deficit narrowed to GBP2.8 billion from GBP21.1 billion in the first quarter of 2020.
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Retailers in the UK continued to cut prices in September, data showed, but experts warned companies will have no choice but to pass cost rises onto the consumer should the UK and EU fail to get a Brexit deal over the line. According to the British Retail Consortium-Nielsen shop price index, prices fell by 1.6% annually in September, the same rate of decline seen in August. It was a steeper fall than the 12-month average decline of 1.1%, but slightly slower than the 1.7% average six-month decline. The annual decline in non-food prices eased to 3.2% in September from 3.4% in August. Over the past six months, the average plunge in non-food prices was 3.5%, with the average 12-month fall at 2.6%. Food inflation eased to 1.2% from 1.3% in August and below the six-month and 12-month average increases of 1.4%.
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Japan's industrial production was up 1.7% in August from July for the third straight month of increase, with the motor vehicles, steel and electronic parts industries being the main drivers of performance. However, the Ministry of Economy, Trade & Industry said that compared with the same month last year, production fell 13% on a deterioration from the production machinery, electrical machinery and paper industries.
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BROKER RATING CHANGES
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RBC RAISES FERGUSON TO 'SECTOR PERFORM' ('UNDERPERFORM') - TARGET 7500 (6000) PENCE
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SOCGEN CUTS RIO TINTO TO 'HOLD' (BUY)
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BARCLAYS RAISES AG BARR TO 'EQUAL WEIGHT' ('UNDERWEIGHT') - TARGET 430 (310) PENCE
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COMPANIES - FTSE 100
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Land Securities and CRH both said their finance chiefs will depart. Property developer Landsec said Martin Greenslade will step down as chief financial officer during 2021, after 16 years in post. Construction materials firm CRH said Senan Murphy will retire as finance director, also during 2021, though will remain as an adviser after the transition to a successor.
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Caterer Compass said revenue for its financial year ending Wednesday is down 19%, having fallen 44% in the third quarter and 36% in the fourth. Compass said it saw some improvement in the fourth quarter and students began to return to schools and workers to offices.
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COMPANIES - FTSE 250
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William Hill said it has reached an agreement with suitor Caesars Entertainment to acquire the UK bookmaker. Caesars will offer 272 pence in cash, valuing the high street bookmaker at GBP2.9 billion. "The William Hill board believes this is the best option for William Hill at an attractive price for shareholders. It recognises the significant progress the William Hill group has made over the last 18 months, as well as the risk and significant investment required to maximise the US opportunity given intense competition in the US and the potential for regulatory disruption in the UK and Europe," said William Hill Chair Roger Devlin.
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COMPANIES - MAIN MARKET AND AIM
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The UK energy regulator has set its sights on payment services firm PayPoint. Ofgem said PayPoint has included exclusivity clauses in most of its contracts with energy suppliers and retailers, limiting their ability to use rival services and thus excluding PayPoint's competitors from the market. Ofgem said PayPoint has "abused" its dominant market position in the market for over-the-counter payment services for prepayment energy customers for at least the period running from April 2009 to October 2018. "At this stage of the investigation, our findings are provisional and no conclusion should be drawn that there has been an infringement of competition law at this stage. We will carefully consider any representations from the company before deciding whether the law has in fact been broken," Ofgem said.
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COMPANIES - GLOBAL
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Five years after "dieselgate" emissions cheating revelations rocked the car industry, ex-Audi CEO Rupert Stadler on Wednesday becomes the first top executive to stand trial in Germany. Stadler, 57, faces charges of "fraud, falsifying certifications and false advertising", according to the indictment that will be read out before the Munich district court. He will be in the dock alongside former Audi and Porsche manager Wolfgang Hatz and two Audi engineers, all facing the same charges. German car giant Volkswagen – whose subsidiaries include Porsche, Audi, Skoda and Seat – admitted in September 2015 that it had installed manipulating software in 11 million diesels worldwide. The so-called defeat devices made the vehicles appear less polluting in lab tests than they were in real driving conditions, allowing the vehicles to emit toxic gases far beyond the legal limit. Not a single senior executive has been convicted over the scam in Germany, although two VW employees have received jail terms in the US.
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Wednesday's Shareholder Meetings
Active Energy Group
Anglesey Mining
Catena Group
Chenvari Capital Solutions - EGM re base currency change to euro
City of London Group
Clipper Logistics
Creightons
daVictus
Distribution Finance Capital Holdings
HML Holdings
IntegraFin Holdings - GM re hybrid general meetings
Marlowe
Mobile Tornado Group
Motif Bio
Powerhouse Energy Group
Purplebricks Group
Renishaw
San Leon Energy
Sosandar
Studio Retail Group
Tekmar Group
TheWorks.co.uk
Yew Grove REIT - EGM re gearing level
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
