Gas segment pushes Shell's profits to nearly $10 billion

May 4 (UPI) -- Shell reported a first-quarter profit of $9.6 billion on Thursday, with its fuels and gas businesses offsetting a downturn in market prices.

Shell joined the growing list of energy majors reporting bloated profits over the first three months of 2023. At $4.9 billion, the company's vast natural gas segment accounted for the bulk of the profits over the first quarter. Behind that was exploration and production, as well as marketing.

Total production was up 5.8% during the three months ending in March, while the total volume of natural gas converted to the liquid form increased by nearly 6% from fourth quarter levels. Shell attributed much of the gains to increased activity at its Prelude liquefied natural gas facility in Australia.

"In Q1, Shell delivered strong results and robust operational performance, against a backdrop of ongoing volatility, while continuing to provide vital supplies of secure energy," Wael Sawan, Shell's CEO, said.

Broader markets were highly volatile over much of the first quarter as most Western economies flirted with recession given lingering inflationary strains. Both the U.S. Federal Reserve and the European Central Bank raised their interest rates again this week because inflation remains above target.

Commodities, meanwhile, have been on a downward trend. Both crude oil and natural gas prices are below fourth quarter levels. Brent, the global benchmark for the price of oil, spent much of the early part of the year in the mid-$80 range, but was trading closer to $72 per barrel at the start of trading on Thursday.

Though overall profits for Shell were close to $10 billion, first quarter performance was about $200 million lower than during the fourth quarter.

Elevated profits for major energy companies are nonetheless a running theme so far this year.

British energy giant BP on Tuesday posted a $5 billion profit for the first quarter, its second-best performance since 2012. Like Shell, BP said profits were supported by "exceptional" results from its gas marketing and trading segments.

But, also like Shell, BP underperformed relative to previous quarters.