Shell Share Discussion Threads

[waldron] 27/2/2018 09:32

World's Biggest Wealth Fund Returned $131 Billion in 2017
By Sveinung Sleire
and Mikael Holter
27 février 2018 à 10:00 UTC+1

Norway’s wealth fund held 66.6% in stocks, 30.8% in bonds
Norway’s $1 trillion wealth fund rallies with global markets

Norway’s sovereign wealth fund returned $131 billion in 2017, capping a year in which it passed the $1 trillion mark and shocked markets by proposing to drop oil and gas stocks.

The Oslo-based fund, which owns on average 1.4 percent of the world’s listed stocks, largely follows indexes but has leeway for some active management. It’s in the process of raising the share of stocks in its portfolio to 70 percent to improve returns. It’s also increasing its influence in areas such as executive pay, corporate corruption and sustainable investing.

Yngve Slyngstad
Photographer: Krister Soerboe/Bloomberg

“The fund’s cumulative return since inception has passed 4,000 billion kroner. One out of four kroner of return was generated in 2017, after a very strong year for the fund,” said Chief Executive Officer Yngve Slyngstad in a statement.

Norway’s $1 Trillion Fund Wants Out of Oil and Gas Stocks

The fund’s 13.7 percent return was generated in a year characterized by the biggest stock-market boom in eight years. The development pushed stocks to about 66.6 percent of its portfolio, edging closer to the 70 percent target.

The fund’s stock portfolio rose 19.4 percent in the year, while fixed income investments gained 3.3 percent and real estate grew 7.5 percent. It held 66.6 percent in stocks at the end of 2017, 30.8 percent in bonds and 2.6 percent in real estate.

The fund’s biggest equity investments in 2017 were Apple Inc., Nestle SA and Royal Dutch Shell Plc, while its largest fixed income holdings were U.S., Japanese and German government bonds.

The fund has also moved more into emerging markets over the past years to raise returns and the government is currently looking into whether it should buy private equity and infrastructure.

The government withdrew 61 billion kroner from the fund last year, after tumbling oil prices forced its first-ever withdrawals in 2016.

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[waldron] 27/2/2018 08:24

Shell A
2,289.5 +0.48%



Shell B
2,322.5 +0.37%

[montyhedge] 27/2/2018 08:12

No chance back below $50 more like $72.

[waldron] 26/2/2018 18:36

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Energy

Shell says LNG demand beat expectations in 2017
By Christopher Alessi

Published: Feb 26, 2018 12:03 p.m. ET






LONDON--Global demand for liquefied natural gas grew ahead of expectations in 2017, Royal Dutch Shell PLC RDSA said Monday.

The British-Dutch oil giant said in its second annual LNG outlook that the global LNG market grew by 29 million metric tons last year, to 293 million tons, boosted by strong demand in Asia.

"In Asia alone, demand rose by 17 million tons. That's nearly as much as Indonesia, the world's fifth-largest LNG exporter, produced in 2017," Maarten Wetselaar, Shell's director for integrated gas and new energies, said.

Japan continued to be the world's largest importer of LNG in 2017, while China surpassed South Korea to become the second biggest importer.

Shell said it predicts supply shortages for LNG by the mid-2020s if new production projects are not agreed in the near future.

Write to Christopher Alessi at [e-mail]

[waldron] 26/2/2018 17:06

the white house
26 Feb '18 - 13:28 - 2253 of 2255

HAVE DOUBTS OF COST ONLY RATES AS SUBSIDIARIES WOULD BE DEALT WITH AT ARMS LENGTH
BUT OF COURSE PROFITS MAY SEEP UP OR DOWN STREAM WITH HEDGING AND TRADING

WHATEVER THE SWEAT SPOT A HIGH PRICE IN THE SHORT TO MEDIUM TERM WOULD OF COURSE A GOOD THING

WILL MORE US SHALE PRODUCERS BRINGING MORE ON THE MARKET BURST THE BUBBLE
SOONER RATHER THAN LATER

[waldron] 26/2/2018 16:59

Shell A
2,278.5 +0.89%



Shell B
2,314 +1.27%

PREMIUM SEEMS TO HAVE WIDENED

[the white house] 26/2/2018 13:28

I sit in the higher the better camp. Is it not key vis a vis higher input costs these apply only to those, unlike Shell, who have to pay current Brent type rates to buy the input as opposed to cost only rates from in house Shell deliveries?

[grupo] 26/2/2018 13:21

Shell predicts LNG supply shortage by mid-2020s following surge in demand

Written by Allister Thomas - 26/02/2018 12:02 pm

lng-outlook-ship-port-at-night
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Energy giant Shell says there could be a supply shortage of liquefied natural gas (LNG) by the mid-2020s unless new investments are made soon.

Global demand saw a huge surge in 2017, according to Shell’s LNG outlook, growing by 29 million tonnes to 293 million tonnes.

Shell says policies in Asia to make more use of the cleaner-burning fuel have played a large role in the process.

Japan remains the world’s largest importer at over 80 million tonnes, while Chinese imports reached 38 million to overtake South Korea as it switches from coal to gas.
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Shell says the issue of supply and demand comes as a result of buyers signing shorter and smaller contracts, while suppliers want long-term sales.

Last year the number of LNG spot cargoes reached 1,100 for the first time – the equivalent of three being delivered per day.

The energy giant says the “mismatch̶1; needs to be resolved in order to help meet global demand.

Maarten Wetselaar, integrated gas and new energies director at Shell, said: “We are still seeing significant demand from traditional importers in Asia and Europe, but we are also seeing LNG provide flexible, reliable and cleaner energy supply for other countries around the world.

“In Asia alone, demand rose by 17 million tonnes. That’s nearly as much as Indonesia, the world’s fifth-largest LNG exporter, produced in 2017.”

[fjgooner] 26/2/2018 13:20

I guess one difference compared to a couple of years ago is that costs have significantly reduced, so perhaps the input costs to refining and chemicals will no longer be as significant when crude is trending higher?

[petepitstop] 26/2/2018 08:43

The past couple of years at Shell has shown downstream, including marketing thriving in a low oil price environment whilst upstream has not. If that is the correct conclusion then the reverse is also true where upstream thrives and downstream less well. Again, if that is correct then there has to be a sweet spot in terms of the oil price. That is my only conclusion, but I am happy to stand corrected if there is indeed no sweet spot.

[waldron] 26/2/2018 08:32

Shell A
2,275 +0.73%



Shell B
2,304.5 +0.85%

thanks for the nice posts you guys

snug in the 2275 to 2375 BOX to start the week

too cold to snow they said, but its trying to snow here on the french swiss border

ski suit on

There SHELL B much snow

enjoy your week

[fjgooner] 25/2/2018 22:51

Pete,

Many thanks for your response.

Whilst I don't doubt for a moment that the spot price of Brent moving up and/or down will have a bearing on where costs will fluctuate by cost centre, the overall profitability of the organisation has been indicated by Shell management to be directly linked to Brent pricing.

In the slides that accompanied the 4th Quarter Results at the start of this month was the unequivocal Shell metric:

Price sensitivity:
+/ -$10 Brent = +/ -~$6 billion CFFO

... along with the commentary in those results ....

"This performance delivered around $28 billion in free cash flow in 2017 with oil at $54 per barrel. By 2020, we expect to deliver between $25 and $30 billion in organic free cash flow, at an oil price of $60 per barrel, real terms 2016. While this outlook is ambitious, our performance in 2017 gives us confidence that it is realistic. We have close to $10 billion in cash flow from new projects still to be delivered in the 2018 to 2020 timeframe, growth across our portfolio and continued cash delivery from operational improvements."

----

So from where I'm sitting it looks clear:

Oil price of $60 per barrel, real terms 2016 --> $25 to $30 billion in organic FCF

versus

Oil price of $70 per barrel, real terms 2016 --> $31 to $36 billion in organic FCF

Until Shell alters their official guidance on this current advice, that is the bottom line that I will continue to place most focus upon.

And at a current average for 2018Q1 of $67.55, I am very happy indeed and doubt that it will be long before the price corrects back above the £26 level seen last month.

All the best for the week ahead,

FJ :)

[sarkasm] 25/2/2018 19:06

February 25 2018 09:15 PM
Business
RELATED STORIES
*
Ole Hansen
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By Ole Hansen

Commodities traded flat on the week with the Bloomberg Commodity Index showing gains in energy being offset by losses across both industrial and precious metals. The agriculture sector traded flat following a month of strong gains, particularly among key crops.
The latest weekly report from the US Energy Information Administration (EIA) delivered a triple dose of bullish news with WTI surging to resistance at $63.15/barrel. This followed a surprise counter-seasonal drop in stocks driven by surging exports while production was flat following a recent jump.
Gold, meanwhile, endured its worst week since early December on the back of a stronger USD, a hawkish Federal Open Market Committee, and the US 10-year government bond yield approaching 3% – a level not been seen since it was rejected back in December 2013.
The fifth consecutive failure (since 2014) in breaking higher has also helped raised short-term concerns about a deeper correction.
The motto of this year’s annual Munich Security Conference, held last week, was “To the Brink – and Back”. All indications unfortunately pointed towards further conflicts as the conference laid bare the major lack of trust among world powers.
It highlighted multiple geopolitical risks ranging from US versus Russia, The West versus North Korea, Europe versus Turkey, and Middle East situation.
Other threats being discussed and worried about were cyber threats and not least the rise in global trade tensions, especially between the US and China. The US Commerce Department recently released its recommendations for restricting imports of steel and aluminium.
The proposal, which now awaits a response and approval from President Trump, could potentially slap punitive tariffs on imports from five major suppliers including China and Russia.
From a global perspective, the impact is likely to be limited with the biggest being the risk of tit-or-tat retaliation on US imports, not only from China but also from other countries singled out by the proposal.
The stock prices of US steel and aluminium producers are likely to receive a boost while US manufacturers making products from the two metals could suffer a competitive disadvantage given the impact of higher prices for domestically produced steel and aluminium.
Industrial metals in general traded lower as Chinese investors returned from their New Year holiday. The weakness was driven by a recovering dollar, increased expectations for further FOMC rate hikes, and China’s quest to deleverage in order to achieve a more sustainable growth trajectory.
While investors await an expected post-holiday pick-up in Chinese demand, the downside risk for now seems limited with HG Copper currently trading within a $3 to $3.3/lb range.
Overall the agriculture sector led by grains seems to have woken up from a multi-year snooze with record high stock levels increasingly being challenged by an uncertain production outlook.
During the past month, a rising weather premium has emerged after extreme heat in the Southern Hemisphere and extreme cold across the Northern hemisphere impacted a variety of food commodities from soybeans to wheat and cocoa.
Additional support has come from the weaker dollar, strong demand, and rising energy prices as well as short covering from hedge funds who have been reducing a record grain short back to neutral during the past four weeks.
The recent rally in key crops led by soybeans due to lower output from Argentina may now pause ahead of the crucially important month of March.
This is when the size of the Latin American harvest will become known while the US planting season begins, and with that news about what and how much US farmers intend to plant.
During the past week, oil and gas operators as well as traders and ministers descended on London for the biggest annual gathering of oil executives at the IP Week.
While the consensus was for higher prices due the successful and ongoing production cuts from Opec and friends, some uncertainty with regard to surging non-Opec production was also seen.
This was highlighted by the International Energy Agency which is forecasting that global demand growth in 2018 and 2019 can be met by rising non-Opec production.
One concern that has started to receive some attention is the actual usefulness of shale oil given its super light quality which is limiting the use for refiners.
All of the current growth in US oil production comes from wells producing very light crude oil which during the refinery process yields less middle distillates such as diesel and jet fuel, two major growth areas when it comes to future demand.
Over the past few decades, the US refinery system has geared itself towards processing heavier fuels from countries like Venezuela, Canada, and the Middle East. The US is therefore increasingly in need of foreign buyers for its light crude, hence the current rise in exports.
The latest weekly report from the US Energy Information Administration delivered a triple dose of bullish news with WTI surging to resistance at $63.15/barrel.
This following a surprise and counter-seasonal drop in stocks driven by surging exports while production was flat following the recent jump.
This brought the price of WTI crude oil to the 61.8% retracement of the January-February selloff.
A break through this level would be a strong indication of the market having established a bottom following the recent correction.
Overall, traders maintain a bullish outlook with the recent weakness only triggering a minor reduction in what a month ago was a record bullish bets on crude oil and products.
April WTI surged higher to reach resistance at $63.15, the 61.8% retracement of the January-February selloff. A break above would signal that a short-term low has been established with potential outside drivers being movements in stocks and the dollar.
Gold prices are presently being reined in by bond yields, the strong dollar, and the hawkish FOMC.
We, however, maintain a positive outlook in the belief that inflation and geopolitical concerns – of which there are currently plenty – together with the potential risk that another stock market setback and weaker-than-expected economic data will continue to attract demand from investors seeking tail-end protection.
Gold is testing trendline support from the December low with a break signalling further losses towards $1,300/oz, a key technical and psychological area of support. Above the multi-year line of resistance currently at $1365/oz sits a key barrier that stands in the way of a potential major upside extension.

* Ole Hansen is head of commodity strategy at Saxo Bank.

[petepitstop] 25/2/2018 17:40

It is a complete guess at around 60 Brent and I would love to ask top management where the sweet point is. It is just my take from the webcasts in November and after the finals earlier this month. I now regard Shell as the top business beneficiary in the world from the major advances in technology which happened over the last decade and now going forward. This company is fast becoming a growth story.

[fjgooner] 24/2/2018 12:36

Pete - if you had to identify the perfect Brent price to most benefit Shell's mix of activities, what would that price be?

[la forge] 24/2/2018 09:15

good point pete

costs are certainly moving downstream

also there is much hedging and trading going on,so a pure play on the oil price
is no longer valid but it is still weighing on the positive side

have a great but very cold weekend

[petepitstop] 24/2/2018 08:03

I doubt that the high 60s Brent will show the top return. Refining and chemicals have double the volume to upstream and margins get squeezed at these levels. Furthermore, marketing margins are also reduced as volumes are double again or 4 times upstream production.

[fjgooner] 23/2/2018 22:14

Brent is now running an average for 2018Q1 of $67.55

Huge! Compared to all benchmarking as offered in Shell's recent results presentation that showed massive returns at $60.

FJ :)

[waldron] 23/2/2018 17:06

Shell A
2,258.5 -0.24%


Shell B
2,285 -0.28%