Shell’s quarterly profits hit by collapse in oil price

Oil giant Royal Dutch Shell has announced a sharp fall in quarterly profits as the price of oil fell significantly towards the end of the year.

Profit for the fourth quarter fell to $4.8 billion (£3.4 billion), a fall of 28% compared with the same period in 2007 and 56% lower than the previous quarter.

However, despite the fall, the company still announced record annual profits for 2008 – higher than that of any UK or European company.

Annual profits grew 14% to $31 billion – boosted by record oil prices during the summer.

Oil reached a high of $147 a barrel in July 2008 but dropped significantly to $40 towards the end of the year. Today, the price is $41.83 in New York and $44.75 in London.

Shell’s chief executive, Jeroen van der Veer, said the quarterly results were “satisfactory given the pressure on demand for oil and gas due to a weaker global economy”.

The slump in the price of oil led some investors to believe that Shell would not meet its dividend payments. However, the company has increased its fourth-quarter dividend by 11% to 40 cents.

Rival oil giant, BP, is due to announce its results next week but analysts believe profits will not reach the level Shell has reported today.

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