Shell Share Discussion Threads

[montyhedge] 23/3/2020 07:20

If that's true, I reckon stop buybacks a good thing, but pay dividend, from the savings.

[pvi1] 23/3/2020 07:09

That is definitely next. I'll be amazed if the dividend remains intact

[32campomar] 23/3/2020 07:05

Shell just announced they are stopping share buybacks backs with immediate effect. Difficult to judge but this may be seen as positive, unless investors view the next step being the dividend being stopped.

[mister md] 23/3/2020 06:35

WTI crude up 1%

[hellscream] 23/3/2020 04:45

depression.

[growthpotential] 23/3/2020 00:10

What mugg would sell his shares now? Ride it out lads and let's get this recession over with

[crossing_the_rubicon] 22/3/2020 23:20

US Futures Crash Limit-Down, Bonds & Bullion Bid


"Widespread Panic" Hits Commercial Property Markets: Deals Implode, Renters Disappear, Businesses Shut Down


Fed's Bullard Warns Unemployment May Soar To 30%, GDP Crash 50% In Q2



Going to be a trying day tomorrow

[matchupitchu] 22/3/2020 22:29

Yup....looks like a blood bath tomorrow....this might be the capitulation moment....

[fjgooner] 22/3/2020 22:28

Any short position taken henceforth should be required to remain open for a compulsory minimum of 12 months.

That would make the spivs think twice before trying to gain from human misery.

[32campomar] 22/3/2020 22:11

Dow and S&P futures both down 4% at 10pm looks like yet another sell off in the morning

[32campomar] 22/3/2020 22:04

WTI currently down 10% at $21.50 as trading resumes, looks set to test $20 this week

[loganair] 22/3/2020 21:34

Oil producers are facing their worst crisis in history, but the market is not at a bottom yet, according to several analysts.

The millions of barrels of additional supply promised by Saudi Arabia will take time to reach their destination. On the demand side, major economies have only begun to slow down, and the gaping hole where the economy once stood is expected to widen. A growing number of analysts say that the global economy is already in a recession.

“Even just a week ago, it was difficult to imagine how oil market conditions could become significantly weaker,” Standard Chartered wrote in a note. “However, over the past week the restrictions placed on mobility by European and North American governments as part of their coronavirus response have significantly magnified the negative demand shock.”

Analysts say that the month of April could see the largest supply overhang in the history of the oil market.

“We now expect the y/y demand loss to peak in April at 10.4 million barrels per day (mb/d), and annual demand to fall by a record 3.39mb/d in 2020,” Standard Chartered wrote in a note.

In the short run, the oil market surplus could reach a peak of 13.7 mb/d in April, Standard Chartered said, with an average surplus of 12.9 mb/d for the second quarter. The inventory buildup could reach a gargantuan 2.1 billion barrels by the end of the year, “stretching the midstream of the industry to its limits,” the bank wrote.

Other analysts have even more dramatic scenarios. Eurasia Group says demand could fall by as much as 25 mb/d in the next few weeks and months. The historic glut means that the world could run out of storage space. “The combination of weakening demand and excess supply is hardly going to be accommodated by onshore storage,” Giovanni Serio, head of analysis at Vitol, told the FT. “At a certain point…we will need to fill all the boats.”

The downturn could lead to more than 200 bankruptcies just in the European oilfield services sector, according to Rystad Energy, or 20 percent of total firms in the sector.

“As front-end prices weaken under the weight of the accumulated surplus oil stockpile, we expect the contraction of activity in the US shale oil industry to accelerate,” Standard Chartered said. The bank forecasts US oil production at 11.87 mb/d in December 2020, down 1.1 mb/d from current levels. In 2021, Standard Chartered said the US may average 11.2 mb/d, exiting the year in December 2021 at 10.69 mb/d.

While April may see the worst of oil demand destruction, Standard Chartered says year-on-year demand could fall by 8.8 mb/d in May and 7.4 mb/d in June. And even after the pandemic passes, there will be an “element of persistent demand loss…driven by permanent changes in air travel behaviour and the demand implications of businesses unable to recover from the initial shock.”

[mister md] 22/3/2020 19:07

'However, Societe Generale analyst Irene Himona said dividends were 'not an issue' in 2014 for the oil majors when crude prices crashed as they have now.

She said: 'Assuming Covid-19 mitigation efforts subside in the second half of the year it will not be an issue in 2020.'

[heialex1] 22/3/2020 17:46

I agree there is just about no floor while the covid disruption is on, but what about after that?

[frazboy] 22/3/2020 17:45

Sogesit - good post. I’ve also worked in the industry, so consider myself reasonably aware of the supply/demand dynamic. A floor of $30 is massively optimistic - just look at what’s about to happen in India, several million barrels of consumption are about to disappear but with no equivalent (yet) loss of supply. The majors should survive this but many of the mid caps with debts are finished - their equity is certainly finished.

[gooner1886] 22/3/2020 16:33

Emirates grounded all thier fleet, probably another blood bath tomorrow chaps! Strap ourselves in

[sogoesit] 22/3/2020 13:46

An interesting point about inflation (and one I remember in my crude price modelling years), but:
1. The Saudi's never, historically, thought in inflation protection terms. Will they now?
Commodities' pricing is concerned with relative power of marginal cost of production. Steel is the commodity that drives costs of production. Steel is energy (coking coal) and transportation (oil) dependent price wise.
2. This is a highly deflationary event (fall in demand). Fall in demand estimates range between 10 and 15 million bopd (going on for 15-20%).
3. Energy costs are significant driver, themselves, of inflation.

40 years ago the marginal cost of Saudi production was in the region of $2/bbl or less.

My guesstimate is that it may be below $10/bbl currently. How does that compare with inflation?
In my view a floor of $30-$40 per bbl is optimistic.

If the Saudis want to re-assert market share dominance, now is the perfect time to do so.

Check-out the nominal historical pricing:

[heialex1] 22/3/2020 11:20

Low prices can last a long time, but considering inflation $10-20 30 years ago is equivalent to roughly $30-40 today...

[volsung] 22/3/2020 11:16

Indeed EJ they will not disappear overnight but trend is definitely down and that was before CV

[volsung] 22/3/2020 10:18

Coal is finished. New mines can’t get insurance and coal power plants are the first to be turned off as demand drops