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TotalEnergies Expects Better LNG Trading in Q4
TotalEnergies expects its fourth-quarter results to have benefited from higher LNG production and prices and stronger gas trading, the French energy group said on Thursday, diverging from other supermajors that have flagged weaker oil and gas trading results for the final quarter of 2024.
TotalEnergies expects its Integrated LNG results to have benefited from a 6% increase in production, LNG realizations above $10 per Mbtu, and stronger gas trading that is back to the performance of the fourth quarter of 2023, the company said in a trading update ahead of the full results on February 5.
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The downstream backdrop remains weak, in both refining and chemicals, TotalEnergies said, but noted that its refining margins have recovered from the lows seen in the third quarter.
Downstream results and cash flow are expected to reflect the $10 per ton increase in European refining margins.
For TotalEnergies, the European Refining Margin Marker (ERM) averaged $25.90 per ton in the fourth quarter, up from an average of $15.40 per ton for the third quarter.
While the company expects its oil and gas production to have slightly increased, within the quarterly guidance range of 2.4 million boepd and 2.45 million boepd, the fourth-quarter results in the exploration and production division are expected to reflect the $5 per barrel drop in oil prices in Q4 from Q3. These would be partially compensated by higher gas realizations, TotalEnergies said.
For the third quarter of 2024, TotalEnergies booked earnings below expectations, due to weak refining margins, lower LNG production, and declining oil prices.
The fourth quarter for TotalEnergies could be better if LNG and gas trading manages to offset the lower oil prices.
The other supermajors have warned of weaker results for Q4 compared to the previous quarter.
Weak oil trading and declining refining margins are expected to lower the fourth-quarter earnings at BP, while Shell expects its LNG production and trading and oil trading businesses to book significantly lower results for the fourth quarter of 2024, due to seasonality and timing of lifting.
ExxonMobil flagged a weaker profit for the fourth quarter of 2024 because of lower refining margins, estimating the size of the negative impact at $1.75 billion.
By Charles Kennedy for Oilprice.com
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Charles Kennedy
Charles is a writer for Oilprice.com
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