TotalEnergies is optimistic about its fourth-quarter performance, expecting stronger results thanks to higher LNG production, better LNG prices, and improved gas trading. This contrasts with other major oil companies, which have warned of weaker oil and gas trading results for the last quarter of 2024.
The French energy company forecasts that its Integrated LNG division will benefit from a 6% production increase and LNG realizations above $10 per Mbtu. Additionally, gas trading is expected to match the strong performance seen in the fourth quarter of 2023, according to the company’s trading update ahead of its full results, due on February 5.
However, the downstream sector remains weak, with challenges in refining and chemicals. TotalEnergies noted that while refining margins have recovered from the lows of the third quarter, the overall environment is still difficult. The company expects downstream results and cash flow to reflect a $10 per ton increase in European refining margins.
The European Refining Margin Marker (ERM) for the fourth quarter averaged $25.90 per ton, up from $15.40 per ton in the previous quarter.
In terms of oil and gas production, TotalEnergies expects a slight increase, within the guidance range of 2.4 million to 2.45 million boepd. However, the exploration and production division’s fourth-quarter results will reflect a $5 per barrel drop in oil prices from the third quarter, partially offset by higher gas realizations.
In the third quarter of 2024, TotalEnergies reported lower-than-expected earnings due to weak refining margins, reduced LNG production, and falling oil prices. The company is hopeful that LNG and gas trading in the fourth quarter will help offset the impact of lower oil prices.
Other major oil companies, including BP, Shell, and ExxonMobil, have cautioned that their fourth-quarter earnings will be weaker. BP expects weaker oil trading and declining refining margins to negatively impact its results, while Shell anticipates a significant drop in LNG production and trading, as well as oil trading, due to seasonal factors and timing. ExxonMobil also expects lower fourth-quarter profits due to reduced refining margins, estimating a $1.75 billion negative impact.
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