London, Jan 10, 2026, 07:58 GMT — Market closed
- Shell flagged weaker fourth-quarter Chemicals and Products performance and lower margins ahead of its results.
- Shares rose 3.0% on Friday after a sharp drop the day before.
- Analysts are watching whether Shell sticks with its $3.5 billion quarterly buyback pace.
Shell (SHEL.L) said its Chemicals and Products segment is expected to be below break-even in the fourth quarter, as its indicative chemicals margin drops to $140 a tonne and trading and optimisation falls from the previous quarter. It expects an indicative refining margin of $14 a barrel, kept its production outlook within prior ranges — upstream at 1.84 million to 1.94 million boed (barrels of oil equivalent per day, a combined oil-and-gas measure) and LNG, or liquefied natural gas, liquefaction at 7.5 million to 7.9 million tonnes — and plans to publish full results on Feb. 5.
The warning lands at a touchy time for the shares. Shell has leaned hard on cash returns to keep the story simple, and any wobble in cash flow tends to drag the buyback into the frame.
Downstream and chemicals have been choppy, and trading desks do not always cushion the bumps. A weak quarter can fade fast — or it can stick, and that’s when investors start arguing about what “sustainable” really means.
Shell shares closed up 3.0% at £26.40 on Friday, after dropping 3.5% to £25.62 a day earlier, according to MarketWatch data. The stock is about 10% below its 52-week high of £29.38, hit on Nov. 11.
Analysts questioned whether Shell will maintain a $3.5 billion quarterly share buyback after the company pointed to “significantly lower” oil trading results and a tax adjustment hitting the quarter. HSBC analyst Kim Fustier wrote she was “less confident” the company can keep the $3.5 billion pace, while RBC’s Biraj Borkhataria said the test is whether the board will “hold the line” despite a weak quarter. UBS analyst Josh Stone cut his fourth-quarter net income estimate by 14% to $3.6 billion and operating cash flow by 9% to $8.7 billion, while Citi’s Alastair Syme lowered net income to $3.83 billion and cash flow to $8.64 billion. Reuters
Shell said it bought back 2,089,933 shares for cancellation on Jan. 9, including 953,773 shares on the London Stock Exchange at a volume-weighted average price (VWAP, an average weighted by volume) of £26.3073. The purchases were part of its existing buyback programme and were executed by Merrill Lynch International, the statement showed.
Energy stocks helped lift London shares on Friday as oil prices climbed more than 1%, with BP (BP.L) and Shell up about 2.2% in that move, a Reuters report showed. Oil prices have been a fast-moving input for the sector this month, and they can swamp company-specific signals for a session or two.
But the downside case is plain enough. If chemicals margins keep sliding and trading stays weak, Shell may have to choose between defending the buyback and keeping headroom on the balance sheet, especially if crude prices soften at the same time.
