- Royal Dutch Shell warned that it would book a massive net impairment charge in the second quarter of up to $22bn after it cut its oil-price forecasts in the wake of the Covid-19 crisis.

Net impairment charges in the second quarter were expected to amount to between $15bn and $22bn.

Shell's announcement follows in the footsteps of British rival BP, which announced giant impairment charges earlier this month.

Shell said it now expected Brent crude prices to average $35 a barrel in 202, rising to $40 in 2021, $50 in 2022 and $60 in 2023.

It pegged its long-term forecast at $60 per barrel.

The company also cut its Henry Hub gas price forecasts and slashed its average long-term refining margin expectation by around 30%.

The impairments are expected to have a pre-tax impact in the range of $20bn to $27bn.

Company gearing was expected to rise up to 3% due to the impairments, while additional impacts on gearing levels were expected due to pensions revaluations.

Shell also updated its production expectations for the second quarter, including a forecast for upstream oil and gas production of between 2.3bn and 2.4bn barrels of oil equivalent per day.

'Although this production range is higher compared with the outlook previously provided, it has had a limited impact on earnings in the current macro environment,' Shell said.

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