MetroNews (Canada): Shell Canada warns on oil products earnings: Thursday, September 22, 2005
CALGARY, Alberta (Reuters) - Shell Canada Ltd.'s <SHC.TO> oil-products division will generate lower-than-expected third-quarter profit, partly because crude costs rose faster than retail gas prices, the company warned on Thursday.
Shell Canada, the country's No. 2 oil producer and refiner, also said unplanned maintenance on a compressor in a hydro-cracker unit at its Montreal East refinery also cut throughput, with its Edmonton refinery down for a planned outage.
The turnarounds forced Shell Canada to buy gasoline at high spot prices, it said.
"Despite these issues, adequate supplies of product have been and continue to be available to meet customer needs," the company said in a statement.
Crude oil prices have jumped by 50 percent this year, hitting a high of more than $70 a barrel after Hurricane Katrina damaged U.S. Gulf of Mexico production and refining capacity.
Refining margins, or the difference in the cost of crude oil and the price of wholesale gasoline, have been wide.
However, marketing margins, or the difference between wholesale and retail prices, have been depressed as pump prices have not kept pace with crude oil prices, the company said.
Shell Canada shares closed down 56 Canadian cents at C$40.25 on the Toronto Stock Exchange. The company is 78 percent owned by Anglo-Dutch oil major Royal Dutch Shell Plc <RDSa.L>
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