By Daniel Hunter

Profits at Royal Dutch Shell were up in the final quarter of 2011, thanks in large to higher oil prices.

The oil giants reported that net income was $6.5 billion (£4.1 billion), up from $5.7 billion a year earlier. For the full year, net income was up more than 50% to $28.6bn.

However, despite the rise in profits it was not all good news, as the firm confirmed it was affected by falling refining margins across the industry.

Oil prices during the final quarter were more than 20% higher than a year earlier.

"Our fourth quarter results were impacted by a sharp downturn in industry refining margins and North American natural gas prices," said Shell chief executive Peter Voser.

"The global economy and energy markets are likely to see continued high volatility. Despite the near-term uncertainties, Shell's focus remains on through-cycle investment for sustainable growth."

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