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UPDATE 1-Shell profit beats forecast on strong oil and LNG trading

Ron Bousso

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LONDON, Oct 31 (Reuters) - Royal Dutch Shell's third-quarter profit dropped by 15% on weaker oil prices but easily beat expectations thanks to a boost from oil and liquefied natural gas (LNG) trading.

The better than expected results in the face of oil prices that fell 17% year on year underscores Shell's tranformation in recent years, with deep cost cuts and a focus on returns after the 2014 industry downturn.

Net income attributable to shareholders, based on a current cost of supplies (CCS) and excluding identified items, fell to $4.8 billion from a year earlier.

That compared with a profit forecast of $3.91 billion in a company-provided survey of analysts.

"This quarter we continued to deliver strong cash flow and earnings, despite sustained lower oil and gas prices, and chemicals margins," Chief Executive Ben van Beurden said in a statement.

Oil and gas production in the quarter fell by 1% from a year earlier to 3.6 million barrels of oil equivalent per day. (Reporting by Ron Bousso Editing by David Goodman)