July 07, 2026 [Reuters]- Shell on Tuesday raised its second-quarter gas production forecast and said gas trading would be significantly stronger ‌than in the previous quarter, helping offset disruptions linked to conflict in the Middle East.

Major oil companies have benefited from heightened energy-market volatility as the U.S.-Israeli conflict with Iran triggered sharp swings in crude oil and natural gas prices, trading returns at companies including Shell, BP and TotalEnergies.

Shell ​said in the quarterly update that output from its integrated gas division is expected to be 610,000 to ​650,000 barrels of oil equivalent per day (boed) in the April to June quarter, compared with previous ⁠guidance of 580,000 to 640,000 boed. Output was 909,000 boed in the first quarter.

The company also raised its outlook for ​LNG liquefaction volumes to 7.4 million to 7.8 million metric tons from 6.8 million to 7.4 million tons. It produced 7.9 ​million tons in the first quarter.

‘SIGNIFICANTLY HIGHER’ GAS TRADING RESULTS

Shell said trading results at its integrated gas segment would be significantly higher than in the previous quarter, while trading results at its chemicals and products division, which includes its large oil trading operation, are expected to be in ​line with the previous quarter’s strong performance.

Citi raised its second-quarter earnings-per-share forecast for Shell by 13%, citing the company’s “incrementally positive” ​update, including strength in trading, chemicals and fuels marketing.

Shell shares were up 3.2% at 0825 GMT, outperforming a 0.3% gain in the broader ‌European energy ⁠sector.

In the second quarter, the Brent crude global benchmark averaged about $97 a barrel, up from $78 in the first quarter and $67 a year earlier.

The benchmark Dutch front-month gas contract at the TTF hub averaged about €46 per megawatt-hour during the quarter, up from around €40 per MWh in the previous quarter and €36 per MWh a year earlier.

IMPROVED SHORT-TERM LIQUIDITY

Shell forecast a working-capital inflow of $1 billion to $6 ​billion in the second quarter, ​compared with an $11.2 billion outflow ⁠in the first, reflecting the impact of commodity-price volatility. Working capital is a measure of current assets minus current liabilities.

The company guided for higher indicative refining margins of about $20 per barrel ​and chemicals margins of about $240 per ton in the second quarter, although it said realised ​margins were below ⁠those levels because of market dislocations.

Production at Shell’s Pearl gas-to-liquids plant in Qatar was halted in March after an attack on Ras Laffan Industrial City damaged one of the facility’s two trains. Shell has said repairs could take about a year.

About 20% of Shell’s oil ⁠and gas ​production, or 550,000 boed, comes from the Middle East, of which about ​10% is linked to Qatar.

Shell’s adjusted earnings rose to a two-year high of $6.9 billion in the first quarter, beating estimates and benefiting from gains linked to ​the Middle East war. The company subsequently raised its dividend by 5%.