Shell Share Discussion Threads

[waldron] 24/7/2015 20:40

Get Out While You Can, The Price Of Oil Could Be Heading To $30!
By Motley Fool | Fri, 24th July 2015 - 16:21
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The price of oil is charging lower once again. At time of writing, Brent crude is trading at $55.06 per barrel, $6.30 above its five-year low of $47.80/bbl printed at the beginning of this year.

Unfortunately, if the past few weeks are anything to go by, the price of Brent could push to a new five-year low in the next few weeks. Many analysts are predicting just that.
Supply/demand story

This week the World Bank downgraded its forecasts for global oil consumption over the next two years. At the same time, Saudi Arabia announced that its production had hit record levels, despite the fact that prices are in freefall.

Meanwhile, production of oil in the United States remain at 40-year highs. Even though oil prices are falling, shale producers continue to drill more wells, adding to the region's oil glut. On top of these factors, new supply from Iran could be about to hit the market. It's estimated that Iran could add an additional 1m barrels of oil per day in supply to the oil market.

So all in all, it's pretty clear that the oil market is oversupplied, and until supply begins to fall or demand rises dramatically, the price of oil will remain depressed.
Heading lower

City analysts believe that the price of oil could head lower by more than 20% from present levels, which would take it below $45/bbl. Other analysts have put forward the case that, for noticeable levels of supply to be taken out of the market, the price of oil needs to fall as low as $30/bbl.

Whatever the case, it's widely accepted that the price of oil will fall to $40/bbl before heading higher again.
Not all bad news

For pure exploration and production companies, like Genel Energy, Enquest, Tullow Oil and Premier Oil, a low oil price is disastrous. However, for big integrated oil companies such as BP, Shell, Total and ExxonMobil, low oil prices are not a huge problem.

Indeed, as oil prices fall, refining margins are exploding with the average European refinery has reported a five-fold increase in profits over the past three months. Shell and BP have both reported four-fold increases in refining profits.

Refining arms, which used to be an afterthought for big oil, are now responsible for the majority of the industry's profit. Profits from refining contributed 80% of Shell's and 73% BP's first-quarter net income, up from around 20% last year.
The bottom line

Overall, with supply outpacing demand, it doesn't look as if the price of oil is going to rebound any time soon. Unless demand starts to pick up, oil will continue to decline, and many analysts see the price falling to $40/bbl or even $30/bbl before the market begins to rebalance. It's inevitable that some companies will go out of business along the way.

However, over the long term, as the supply of oil declines and demand continues to increase, oil prices should head higher once again. The long-term investor has nothing to worry about.

Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended shares in Tullow Oil. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

[eisler] 24/7/2015 18:53

In other Royal Dutch Shell Plc news, insider Simon Henry sold 20,000 shares of the stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of GBX 2,117 ($33.04), for a total transaction of £423,400 ($660,736.58). Nice.

[eisler] 24/7/2015 18:51

Pay no attention to brokers or analysts - they know jack. They are professional guessers and almost always wrong.

[waldron] 24/7/2015 17:58

TICKER REPORT

Equities research analysts at Investec set a GBX 1,900 ($29.65) price target on shares of Royal Dutch Shell Plc (LON:RDSB) stock in a research note issued to investors on Friday, StockTargetPrices.com reports. Investec’s price target indicates a potential upside of 5.67% from the stock’s previous close.

In other Royal Dutch Shell Plc news, insider Simon Henry sold 20,000 shares of the stock in a transaction that occurred on Tuesday, May 5th. The stock was sold at an average price of GBX 2,117 ($33.04), for a total transaction of £423,400 ($660,736.58).

Shares of Royal Dutch Shell Plc (LON:RDSB) traded down 1.6407% on Friday, hitting GBX 1768.5000. 2,546,695 shares of the company’s stock traded hands. Royal Dutch Shell Plc has a 1-year low of GBX 1,761.50 and a 1-year high of GBX 2,599.00. The stock has a 50-day moving average of GBX 1,862.08 and a 200-day moving average of GBX 2,060.50. The company’s market cap is £111.46 billion.

[essentialinvestor] 24/7/2015 17:10

With oil and equities selling off it's a double whammy for the SP
so not surprising.

Had a few BG. this afternoon, just 10% of my RDSB holding.

[redartbmud] 24/7/2015 14:55

Am I surprised that the analysts are giving blue sky ratings here?
No.

I am holding regardless.

[supermarky] 24/7/2015 12:44

The weakness continues....

[supermarky] 23/7/2015 10:47

free stock charts from uk.advfn.com

[essentialinvestor] 23/7/2015 09:52

Eisler, most posters are very aware the share price may head lower.
Many of the more bullish comments on Shell are based on a longer term
view, calling the exact low is exceptionally difficult.

Wider market levels, the UKX etc and the oil price are big factors.

If oil and equity markets head lower then RDSB likely goes in the same direction,
at least to an extent.

[supermarky] 23/7/2015 09:13

And when barclays tp comes in I'll be a happy man!

[wllmherk] 23/7/2015 09:12

.....I will keep buying more at these levels especially if we go sub £17. I would concur Eisler regarding the headwinds but there are other longer term factors to consider that should see oil price recover, namely, increased demand as economies recover, increasing population and instability in the middle East. With oil prices quite low many companies have shelved development of new wells, this, at some point, will hit supplies in the future.
My own view is these will recover at some point and those that bought and held will make money. Not easy when you are down so much on paper, but, I;ve been here before and patience has been my success.


wllm

[supermarky] 23/7/2015 09:11

Yes but sentiment can change quickly. The list of bear reasons have been know knowns for some time. At what point are they factored into the sp? I am averaging down with this one. If it goes to 1600 i will buy more. The divi will be welcome in the mean time.

[jonwig] 23/7/2015 08:27

"Maybe look at the facts, trends & broker forecasts etc."

For the avoidance of doubt, these appear to be the broker forecasts, going back to Nov 2014:



I don't see one saying anything about a downgrade, let alone a 1600p target price.
Of course, the list above might not be exhaustive. In which case ...

It's generally useful, when making an assertion "based on fact", to provide a link, to show good faith.

[daveofdevon] 23/7/2015 02:47

If you type "form 8.3" into Google all will become clear. The general idea being that holders of more than 1% must disclose each and every change in holding during a takeover period.

[moneysage] 23/7/2015 00:47

Sorry to ask this question again but hoping someone can answer:Since the BG deal was announced why the huge daily increase in volume of FORM 8.5 and FORM 8.3 regulatory announcements?

[xxxxxy] 22/7/2015 21:24

General Markets are a bit reddy at moment.

[irnbru2] 22/7/2015 19:36

TS,

Just saw your post.

I. Assume Proj is a wind up merchant.

[irnbru2] 22/7/2015 19:35

Proj   22 Jul'15 - 16:54 - 3682 of 3685    0   0

RDSB rating downgraded - and heading to 1600p.

-----

Proj,

Where did you hear this.

Is there a link.

Cheers.

[trulyscrumptious] 22/7/2015 17:16

If you read some of his other posts you'll see Proj is not worth a reply. Filter button I think.