The share prices of FTSE 100 commodity firms Shell (LON: RDSB) (RDSB.L) and BHP (LON: BHP) (BHP.L) have risen by 4% and 7% respectively over the past month. In that time they have released news updates.
Shell released an update to the outlook provided in its fourth quarter 2020 results on 7 April. The Texas winter storm had an impact on its operations in the first quarter of the 2021 financial year. The company expects this to equate to an aggregate adverse impact of up to £200 million on adjusted earnings.
In addition, the oil and gas company provided updated guidance on its segmental outlook. In integrated gas it expects production to be between 920 and 960 thousand barrels of oil equivalent per day in the first quarter. LNG liquefaction volumes are due to be between 7.8 and 8.4 million tonnes.
In upstream, Shell expects adjusted earnings to be positive in the first quarter of the year due to the upbeat commodity price environment. Production is expected to be between 2,400 and 2,475 thousand barrels of oil per day.
In oil products, the company’s utilisation is expected to be between 71% and 75%. Its refining indicative margin is around $2.6/bbl, which is up from the $1.6/bbl announced at the time of its fourth quarter results. Meanwhile, adjusted earnings in the firm’s chemicals division are forecast to be positively impacted by improved base margins and slightly higher intermediate margins compared with the preceding quarter.
In addition to updated guidance, Shell also released its energy transition strategy. It will seek to become a net-zero emissions energy business by 2050. A key part of this will be its gradual pivot from fossil fuels to cleaner forms of energy.
Over the past year the Shell share price has fallen 6%. In the past five years it is down 26%. Over the same time period, the FTSE 100 index is up 17% and 12%, respectively. The next update due to be released by the firm is its first quarter results on 29 April.
Fellow FTSE 100 commodity firm BHP also released news regarding its share price over the past month. It released an operational review for the first nine months of the year on 21 April. Production guidance for the full year remains unchanged for petroleum and iron ore. Copper guidance has increased to between 1,535 kt and 1,660 kt due to stronger than expected performance at Escondida.
Metallurgical coal guidance has been reduced to between 39 and 41 MT because of wet weather impacts in December 2020. Meanwhile, energy coal guidance has been cut to between 18 and 20 MT because of weather impacts.
BHP stated in its update that full year unit cost guidance remains unchanged for petroleum and Western Australia iron ore (WAIO). Unit costs for Escondida have been lowered to $0.95-$1.10 per pound, while unit costs for Queensland Coal have been increased to $74-$78 per tonne.
Looking ahead, the company is next due to update the stock market on 20 July when it releases its operational review for the full year. Over the past year, its shares have risen by 67%. In the past five years they are up by 138%.
Not Investment Advice
Note: Views expressed are those of the writer. The author does not own any stocks mentioned. The article is information, not advice. Share prices can rise and fall. Past returns are not a guide to the future. Please do your own research.