Shell Share Discussion Threads

[waldron] 10/10/2018 17:14

Total
55.1 +0.49%


Engie
12.175 -4.96%

Orange
13.845 +1.84%

FTSE 100
7,145.74 -1.27%
Dow Jones
26,079.69 -1.33%
CAC 40
5,206.22 -2.11%

Brent Crude Oil NYMEX 83.34 -1.77%
Gasoline NYMEX 2.02 -2.43%
Natural Gas NYMEX 3.28 -0.73%




BP
569.2 -1.69%


Shell A
2,562 -1.25%


Shell B
2,599 -1.48%

[la forge] 10/10/2018 09:29

4 top dividend shares? Vodafone Group plc, AstraZeneca plc, National Grid plc and Royal Dutch Shell Plc
Do these income shares offer impressive outlooks? Vodafone Group plc (LON:VOD) (VOD.L), AstraZeneca plc (LON:AZN) (AZN.L), National Grid plc (LON:NG) (NG.L) and Royal Dutch Shell Plc (LON:RDSB) (RDSB.L)
October 10, 2018 Robert Stephens FTSE 100




Vodafone Group plc
Vodafone Group plc

The income investing prospects of Vodafone Group plc (LON:VOD) (VOD.L), AstraZeneca plc (LON:AZN) (AZN.L), National Grid plc (LON:NG) (NG.L) and Royal Dutch Shell Plc (LON:RDSB) (RDSB.L) seem to be relatively positive in my view.

Vodafone’s share price fall means that it has a dividend yield of over 7%. Although the company is seeing its investment-related costs increase as it bids on 5G spectrum, I think that its long-term growth prospects continue to be bright.

The acquisitions it has made may strengthen its overall position, while partnerships could lead to improved competitiveness in key markets. With EPS growth expected to improve next year, I think the Vodafone share price may have investment appeal.

AstraZeneca’s investment in its pipeline could lead to stronger EPS performance over the next few years. The company has been able to put in place what seems to be a stronger foundation for future growth, and this could prompt a higher valuation further down the line.

With a dividend yield of around 3.7%, I think AstraZeneca remains a relatively appealing income stock. While dividend growth has been non-existent in recent years, its improving financial performance could lead to a rise in shareholder payments in future.

National Grid’s dividend yield of around 6% is relatively high when compared to its recent history. This suggests to me that the stock could offer good value for money, while it may also provide a degree of defensive characteristics in case the FTSE 100 continues its recent fall.

While political and regulatory risks remain high, I think that National Grid’s overall strategy is sound. Its focus on investing in its North American assets could lead to a stronger overall business in the long run.

Shell’s dividend yield stands at over 5% at the moment, which suggests that the company may offer a large margin of safety.

Sure, the oil price could come under pressure, and the company’s future may be uncertain. But with free cash flow set to improve and the company engaging in an asset disposal programme, I’m upbeat about its financial outlook. As a result, I feel that Shell’s dividend prospects could improve over the medium term.




About Robert Stephens 4520 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email [e-mail] or use one of the other contact methods available on the 'Contact Us' page

[ariane] 10/10/2018 08:50

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (October 10, 2018).

Big oil companies are betting on natural gas as the fuel of the future -- and working hard to ensure new projects deliver profits of the future.

Royal Dutch Shell PLC last week announced a liquefied natural gas project in Canada that will cost $14 billion to build, while Exxon Mobil Corp. and partners are expected to approve a multibillion-dollar LNG project in Mozambique in 2019. That is a similar timeline to Russia's roughly $20 billion Arctic LNG-2 project, which is part-owned by France's Total SA.

Natural-gas projects historically have delivered lower returns than big oil projects, leading companies and shareholders to prioritize oil developments. That's something the companies are working hard to change.

Still, According to Edinburgh, Scotland-based consultancy Wood Mackenzie, the weighted average internal rate of return for liquefied natural gas projects currently in the pipeline is about 13%. That compares with 20% for deep water projects and 51% for unconventional oil developments like shale.

"The problem for oil companies is that gas is much more difficult to make profitable," said Eirik Wærness, chief economist at Norwegian oil company Equinor ASA, formerly known as Statoil.

The case for gas also becomes even more difficult, at least in the short term, when oil prices are high, as they have been recently., though oil companies invest on a long-term horizon

Yet big oil has little choice but to double down on gas. Companies have discovered fewer large new oil depositsthan natural gas opportunities over the past decade. Governments, including China and many in Europe, want to reduce pollution by burning cleaner fuels for transport and electricity. A new natural-gas power plant emits around half the carbon dioxide emitted by a new coal or fuel-oil plant.

Rising global demand also makes a compelling case for natural-gas investment. Oil consumption is expected to rise by just 0.5% a year out to 2040, according to Wood Mackenzie, substantially slower than in previous decades. Some forecasts say demand could stop growing altogether within the next decade.

Natural-gas consumption, though, is expected to rise to 24% of the world's energy mix by 2040, from 22% in 2016, according to the International Energy Agency. LNG's share of that market is set to rise to almost 40% in 2023, from around a third in 2017, the IEA forecast.

By 2025, both Shell and BP PLC will be producing more gas than oil. French giant Total SA's production is near 50-50 split. Exxon Mobil Corp. is also planning significant new investments in LNG.

"It's all a balancing act," said Brian Youngberg, senior energy analyst at brokerage Edward Jones. "At the end of the day, oil is the most profitable product they produce, but demand is going to slow so you need to start managing that transition."

At the same time, oil companies are eyeing efforts to curb global warming that could make lower-carbon natural gas more competitive. Policies like a substantial price on carbon "moves the dial on gas," Mr. Wærness said.

Oil companies are selling the strategic shift as a smart bet on a growing market.

"The good news is that the natural gas market will continue to grow, and this explains why we are aggressive, offensive and expanding," Total CEO Patrick Pouyanné told investors last month. "On the contrary, the oil market will stabilize and even decline."

Investors have embraced the strategy, with some reservations. Big gas projects generate lower returns, but they are profitable and provide much more stable long-term cash flow than most oil developments -- attractive characteristics for shareholders who want to know their dividends are secure. And internal rate of return is just one measure. Many big gas projects offer opportunities for profit-generation through trading and business integration.

The natural-gas projects provide "very stable and consistent cash flow and this is something oil-and-gas companies have never really had, and what has made them so cyclical," said Richard Hulf, a manager of the Global Energy Fund at Artemis Fund Managers.

Companies are continuing to make significant oil investments, providing a balance to higher risk, higher reward projects that many investors like.

Yet the dash for gas highlights broader risks for the sectorin an age of lower-carbon energy and an eventual shift away from fossil fuels altogether to more renewable energy.

"The pivot to gas the industry is engaging in will over time probably mean the industry is pursuing a dramatically smaller overall profit pool -- unless gas pricing moves to energy equivalence with oil, which is unlikely," said Nick Stansbury, head of commodities research at Legal & General Investment Management.

Investment in renewable energy for electricity generation is already outpacing fossil fuels globally, driven by falling costs of producing wind and solar power. More than half of power-generating capacity added in recent years has been in renewable sources, according to the IEA.

"Longer term it's the logical thing to be doing if you believe that the gas market has got more longevity and is going to continue growing," Wood Mackenzie analyst Tom Ellacott said.

Big oil companies are working to drive down costs, secure buyers and leverage their market clout to maximize returns. Shell pushed back the approval of its Canadian LNG project by two years and split it in half as it worked to bring down the costs. It expects the project to generate an internal rate of return of 13%.

The moves point to the potential for a more sober oil-and-gas industry, less prone to the dramatic slumps that come with oil-price cycles yet with equally less promise to reach heady peaks. "You will see lower return on investments for some of these [gas] projects," said Espen Erlingsen, a partner at Norwegian consultancy Rystad Energy. "I guess that's something they have to live with."

Write to Sarah Kent at [e-mail] and Sarah McFarlane at [e-mail]



(END) Dow Jones Newswires

October 10, 2018 02:47 ET (06:47 GMT)

[waldron] 09/10/2018 17:05

Total
54.83 +1.44%

Engie
12.62 -0.28%

Orange
13.595 -0.07%

FTSE 100
7,237.59 +0.06%
Dow Jones
26,471.91 -0.06%
CAC 40
5,318.55 +0.35%

Brent Crude Oil NYMEX 84.84 +1.22%
Gasoline NYMEX 2.08 +0.09%
Natural Gas NYMEX 3.26 -0.79%


BP
579 +0.42%


Shell A
2,594.5 +0.91%


Shell B
2,638 +1.01%

PREMIUM SEEMS TO BE ON THE RISE AT 43.50p

MIGHT BE THAT THE DUTCH ARE HAVING SECOND THOUGHTS OF DOING AWAY WITH THE WITHHOLDING TAX
AFTER THE UNILEVER FIASCO

[waldron] 09/10/2018 16:05

Business

Shell not ‘going soft’ on fossil fuel future, says boss

Save
1
Shell HQ
Credit: Peter Dejong

Jillian Ambrose, Energy Editor

9 October 2018 • 3:35pm

Royal Dutch Shell may be spending billions of dollars on renewable energy and and electric cars, but the oil major is not straying far from its fossil fuel roots just yet.

The energy giant’s chief executive Ben Van Beurden has warned the industry not to be swayed by the flurry of headlines marking Shell’s steps towards cleaner energy.

“Even headlines that are true can be misleading,” he told delegates at a London conference.

“They might even make people think we have gone soft on the future of oil and gas. If they did think that, they would be wrong," he said.

Speaking one day after the UN’s landmark climate report warned that more must be done to reduce greenhouse gas emissions, Mr Van Beurden said Shell still “means business” on oil and gas.

Shell plans to invest between $1bn to $2bn every year on building a foothold in the electricity sector by investing in renewable electricity, home energy supply and electric vehicle charging.

But the investment pot is still dwarfed by its $25bn annual budget for Shell’s traditional activities exploring and producing oil and gas.
Ben Van Beurden, Shell chief executive
Ben Van Beurden, Shell chief executive Credit: EPA

“Shell’s core business is, and will be for the foreseeable future, very much in oil and gas and particularly in natural gas. Oil is going to be needed by this world for a long time to come,” Mr Van Beurden said.

Although Shell is already shifting its fossil fuel focus from oil towards gas, the FTSE 100 energy giant’s pace of change “will be linked to the pace of change in society”, he added.

“I believe it is right to be spending up to $2bn on areas like renewables, new fuels and supplying electricity because that is what our customers will want over the long term and Shell intends to stay with our customers over the long term,” he said.

“But we also intend to stay with them right now, next year and for all the years to come until this long-term future becomes reality,” he added.

The oil giant has staked a multi-billion dollar bet on the growing demand for natural gas over the next decade, which shows that the group “means business when it comes to gas”.

Its forecasts suggest that gas will be the single fastest growing energy sector due to strong demand from growing economies in Asia, where coal-fired power is taking a toll on air quality.

Shell has followed its £36bn acquisition of natural gas shipper BG Group with plans to invest $12bn in a long-awaited project to ship liquified natural gas (LNG) by super-chilled tankers from Canada to energy-hungry Asian buyers.

The $31bn (£24bn) LNG Canada deal is “compelling221; because it low in cost to produce, close to quick shipping routes to the Far East and will result in power generation that is only half as carbon-rich as coal power.

“You should look to LNG Canada to see that Shell means business in gas. We do,” said Mr Van Beurden.

“I do not expect this stance to make big news. No newspaper will run a story with this headline: ‘Oil and gas CEO has confidence in future of gas’. But nevertheless, it is true,” he said.

[adrian j boris] 09/10/2018 14:45

09 Oct 2018 | 12:51 UTC London

Shell CEO says more LNG projects needed to fill demand gap after 2020

Author Robert Perkins Editor Alisdair Bowles Commodity Natural Gas Topic LNG Market Evolution

London — Shell sees the need for investment new LNG projects to meet the fast-growing demand for the fuel in the coming decades, the oil major's CEO Ben van Beurden said Tuesday, reiterating the risks of an LNG "supply crunch" by the mid-2020s.
Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.
Register Now

Shell expects natural gas demand to grow at an average rate of 2% a year, twice the rate of total worldwide energy demand, in the coming years with demand for LNG alone to grow at 4% a year until 2030, van Beurden told the Oil and Money conference in London.

"It's always hard to really see where the demand curve is. Demand is not really visible in LNG," he said. "I think, if you look into the 2020s with our investments with some other plans that we are aware of [the Qatari plans], I think that will simply also not be enough to close the gap. We will we need more things to continue to close that gap."

Shell, in its latest LNG outlook published in February, said the world risks a supply crunch for the fuel by the mid-2020s due to the collapse in LNG sector investment since the 2014 oil price slump.

Qatar, the world's largest LNG supplier and second-biggest gas exporter after Russia, is pushing ahead with plans to increase its LNG output by 30%, helped by an expansion of a fourth train at Qatar Petroleum's LNG plant.

Asked if Shell would be interested in becoming a partner in the expansion, van Beurden said, "I think we have a very compelling set of attributes that we can bring to the partnership... we will be putting forward a proposition when we are invited to do so."

While Shell expects to continue to grow its wider gas business in the coming years, van Beurden said he sees Shell's gas sector expansion becoming "a little less dramatic" than in recent years, given that gas already makes up half of Shell's upstream production volumes and absorbs one-third of its capital spending.
CANADA LNG

On Shell's recent FID for its Canada LNG plant, van Beurden said he is confident that the project will remain competitive on a capital spending and production cost basis, due to intensive work to bring down construction costs.

The use of modular construction methods, standard industry equipment and the fact that Canada will be built on a brownfield site mean the cost will come in at a "competitive" $1,000 per mt/year, van Beurden said.

He said the fiscal framework provided by the Canadian government also helped ensure the project could go ahead.

"We have spent more time on Canada LNG than other projects in terms of de-risking it. If you just look back over the last 4-5 years, the track record we have on delivering projects on budget and ahead of schedule is quite compelling," he said.

Van Beurden declined to confirm reports of headline capital costs of $20-$25 billion for the projects, saying the figures were the result of "someone doing the sums in a certain way."

"Let me be quite clear, LNG Canada would not have made it if it had not had such a compelling case on costs. So it should be. Even at a time of $70, $80 or even $90 oil," he said.

Canada LNG is expected to come on stream in the mid-2020s and will allow LNG from the project to reach Tokyo in half the time of a cargo from the Gulf of Mexico, he said.

--Robert Perkins, [e-mail]

--Edited by Alisdair Bowles, [e-mail]

[adrian j boris] 09/10/2018 14:45

09 Oct 2018 | 12:51 UTC London

Shell CEO says more LNG projects needed to fill demand gap after 2020

Author Robert Perkins Editor Alisdair Bowles Commodity Natural Gas Topic LNG Market Evolution

London — Shell sees the need for investment new LNG projects to meet the fast-growing demand for the fuel in the coming decades, the oil major's CEO Ben van Beurden said Tuesday, reiterating the risks of an LNG "supply crunch" by the mid-2020s.
Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.
Register Now

Shell expects natural gas demand to grow at an average rate of 2% a year, twice the rate of total worldwide energy demand, in the coming years with demand for LNG alone to grow at 4% a year until 2030, van Beurden told the Oil and Money conference in London.

"It's always hard to really see where the demand curve is. Demand is not really visible in LNG," he said. "I think, if you look into the 2020s with our investments with some other plans that we are aware of [the Qatari plans], I think that will simply also not be enough to close the gap. We will we need more things to continue to close that gap."

Shell, in its latest LNG outlook published in February, said the world risks a supply crunch for the fuel by the mid-2020s due to the collapse in LNG sector investment since the 2014 oil price slump.

Qatar, the world's largest LNG supplier and second-biggest gas exporter after Russia, is pushing ahead with plans to increase its LNG output by 30%, helped by an expansion of a fourth train at Qatar Petroleum's LNG plant.

Asked if Shell would be interested in becoming a partner in the expansion, van Beurden said, "I think we have a very compelling set of attributes that we can bring to the partnership... we will be putting forward a proposition when we are invited to do so."

While Shell expects to continue to grow its wider gas business in the coming years, van Beurden said he sees Shell's gas sector expansion becoming "a little less dramatic" than in recent years, given that gas already makes up half of Shell's upstream production volumes and absorbs one-third of its capital spending.
CANADA LNG

On Shell's recent FID for its Canada LNG plant, van Beurden said he is confident that the project will remain competitive on a capital spending and production cost basis, due to intensive work to bring down construction costs.

The use of modular construction methods, standard industry equipment and the fact that Canada will be built on a brownfield site mean the cost will come in at a "competitive" $1,000 per mt/year, van Beurden said.

He said the fiscal framework provided by the Canadian government also helped ensure the project could go ahead.

"We have spent more time on Canada LNG than other projects in terms of de-risking it. If you just look back over the last 4-5 years, the track record we have on delivering projects on budget and ahead of schedule is quite compelling," he said.

Van Beurden declined to confirm reports of headline capital costs of $20-$25 billion for the projects, saying the figures were the result of "someone doing the sums in a certain way."

"Let me be quite clear, LNG Canada would not have made it if it had not had such a compelling case on costs. So it should be. Even at a time of $70, $80 or even $90 oil," he said.

Canada LNG is expected to come on stream in the mid-2020s and will allow LNG from the project to reach Tokyo in half the time of a cargo from the Gulf of Mexico, he said.

--Robert Perkins, [e-mail]

--Edited by Alisdair Bowles, [e-mail]

[adrian j boris] 09/10/2018 14:45

09 Oct 2018 | 12:51 UTC London

Shell CEO says more LNG projects needed to fill demand gap after 2020

Author Robert Perkins Editor Alisdair Bowles Commodity Natural Gas Topic LNG Market Evolution

London — Shell sees the need for investment new LNG projects to meet the fast-growing demand for the fuel in the coming decades, the oil major's CEO Ben van Beurden said Tuesday, reiterating the risks of an LNG "supply crunch" by the mid-2020s.
Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.
Register Now

Shell expects natural gas demand to grow at an average rate of 2% a year, twice the rate of total worldwide energy demand, in the coming years with demand for LNG alone to grow at 4% a year until 2030, van Beurden told the Oil and Money conference in London.

"It's always hard to really see where the demand curve is. Demand is not really visible in LNG," he said. "I think, if you look into the 2020s with our investments with some other plans that we are aware of [the Qatari plans], I think that will simply also not be enough to close the gap. We will we need more things to continue to close that gap."

Shell, in its latest LNG outlook published in February, said the world risks a supply crunch for the fuel by the mid-2020s due to the collapse in LNG sector investment since the 2014 oil price slump.

Qatar, the world's largest LNG supplier and second-biggest gas exporter after Russia, is pushing ahead with plans to increase its LNG output by 30%, helped by an expansion of a fourth train at Qatar Petroleum's LNG plant.

Asked if Shell would be interested in becoming a partner in the expansion, van Beurden said, "I think we have a very compelling set of attributes that we can bring to the partnership... we will be putting forward a proposition when we are invited to do so."

While Shell expects to continue to grow its wider gas business in the coming years, van Beurden said he sees Shell's gas sector expansion becoming "a little less dramatic" than in recent years, given that gas already makes up half of Shell's upstream production volumes and absorbs one-third of its capital spending.
CANADA LNG

On Shell's recent FID for its Canada LNG plant, van Beurden said he is confident that the project will remain competitive on a capital spending and production cost basis, due to intensive work to bring down construction costs.

The use of modular construction methods, standard industry equipment and the fact that Canada will be built on a brownfield site mean the cost will come in at a "competitive" $1,000 per mt/year, van Beurden said.

He said the fiscal framework provided by the Canadian government also helped ensure the project could go ahead.

"We have spent more time on Canada LNG than other projects in terms of de-risking it. If you just look back over the last 4-5 years, the track record we have on delivering projects on budget and ahead of schedule is quite compelling," he said.

Van Beurden declined to confirm reports of headline capital costs of $20-$25 billion for the projects, saying the figures were the result of "someone doing the sums in a certain way."

"Let me be quite clear, LNG Canada would not have made it if it had not had such a compelling case on costs. So it should be. Even at a time of $70, $80 or even $90 oil," he said.

Canada LNG is expected to come on stream in the mid-2020s and will allow LNG from the project to reach Tokyo in half the time of a cargo from the Gulf of Mexico, he said.

--Robert Perkins, [e-mail]

--Edited by Alisdair Bowles, [e-mail]

[xxxxxy] 09/10/2018 12:58

Just not sure. No such thing as 'certainty'

What’s Next For Oil Prices?

Oil prices rallied last week to their highest level since November 2014, with Brent Crude hitting $86 and WTI Crude rising above $75 a barrel at one point in the middle of the week.

Uncertainty has been the buzzword in the oil market over the past couple of months. On the supply side, there’s uncertainty about how much Iranian oil the United States will manage to choke off. Then there’s uncertainty about how much spare capacity Iran’s fellow OPEC members and non-OPEC Russia could summon on short notice to replace Iranian losses. Finally, on the demand side, there’s uncertainty whether oil prices at four-year highs and consequently, fuel prices at multiple year highs, are already denting oil demand growth, especially in emerging markets, which are key oil demand drivers but which have suffered a major depreciation of their currencies against the U.S. dollar over the past two months, making the oil they buy even more expensive. ETC.

[fangorn2] 09/10/2018 09:03

from yesterday..

Shell Approves Long-Awaited Canadian LNG Project
This article by Sarah Kent and Sarah McFarlane for The Wall Street Journal may be of interest to subscribers. Here is a section:



Shell and its partners’ commitment to the project, which will cost roughly $14 billion to construct, signals growing confidence in global gas markets, as rising demand diminishes the threat that new supplies entering the market will cause a glut. It marks the end of a seven-year effort, blighted by weak prices that pushed back the final investment decision on the project by two years.

The decision suggests the prospects are positive for other large gas-export projects. A cluster of developments are currently vying for approval in Qatar, Russia, Mozambique and the U.S. Yet in the U.S. the outlook is dimming.

Earlier this month, China imposed a 10% tariff on imports of super-chilled gas from the U.S. in retaliation to levies imposed by the Trump administration. China is the biggest source of new global LNG demand and is expected to be a voracious consumer in the coming years as a result of efforts to move away from smog-inducing coal-fired power. Its demand rose around 50% in 2017.

“Right now, this is not very good for American LNG projects working hard to take final investment,” said Morten Frisch, a U.K.-based independent gas industry consultant.

More than a dozen LNG projects are awaiting regulatory approval in the U.S., though analysts say only a few are likely to get the go ahead before the end of next year. If Chinese buyers fall away, those projects could become more difficult to finance.


Eoin Treacy's view
Natural gas is abundant and is the natural alterative to coal as economies develop and urbanisation concentrates demand within cities which are easier to run utilities to. It is the clearest bridging commodity which has any hope of meeting emissions goals before next generation batteries eventually transform the economics of renewables. That could be a decade from now and even then, gas will remain an important resource for cooking, heating and cooling.

[fjgooner] 08/10/2018 20:06

08/10/2018
Barclays Capital Reiterates RDSB as Overweight, price target £33.00

LNG sits at 3.98% up today to 3.268.

Brent 2018Q3 trending:
Highest: 86.74 Lowest: 82.55 Difference: 4.19 Average: 84.76

What's not to like?

Except a drop from 27.16 to 26.11 in 3 trading days.

FJ

[waldron] 08/10/2018 17:19

Total
54.05 -1.96%

Engie
12.655 -0.16%

Orange
13.605 -0.37%

FTSE 100
7,233.33 -1.16%
Dow Jones
26,250.9 -0.74%
CAC 40
5,300.25 -1.10%



Brent Crude Oil NYMEX 83.49 -0.57%
Gasoline NYMEX 2.07 -0.45%
Natural Gas NYMEX 3.28 +3.80%




BP
576.6 -2.02%


Shell A
2,571 -1.04%


Shell B
2,611.5 -0.89%

[ariane] 07/10/2018 18:29

Is The U.S. Using Force To Sell Its LNG To The World?
By Robert Berke - Oct 07, 2018, 12:00 PM CDT Middle East

The Trump Administration trade policy is nowhere so clear as in the energy area. For years it was thought that the younger Bush Administration was one of the most energy industry friendly in history. But the Trump Administration has gone far beyond that.

Hiring Ray Tillerson, the former CEO of ExxonMobil, as U.S. Secretary of State, sent a strong signal to the entire industry, even though his tenure proved to be temporary.

Prior to that, the Administration withdrew from the Paris Climate Agreement, a long-held priority of Exxon and the entire oil industry. Following hard upon that, the Environmental Protection Agency (EPA) has reduced or eliminated regulations limiting carbon and other pollutants.

Exxon has for more than a decade underwritten the now discredited, right wing attack on climate change as a hoax. Although the energy industry has now publicly acknowledged climate change as a global threat, in practice the subject is still largely ignored.

Going further, the Trump Administration has removed and reduced regulations that hampered the industry expansion, including allowing drilling on both ocean coast, while easing safety regulations that were brought into effect after BP’s Gulf of Mexico disastrous spill, the worst in U.S. history.

Government protected nature preserves are being opened to exploration and drilling for the first time in generations. Added to that was the dropping of regulations that for many years prohibited export of U.S. crude. Since then, the U.S. has become a major player in the global energy industry.

The Administration currently plans to rescind and lower fuel efficiency standards for autos and trucks. That is likely to encourage increased purchase of larger SUVs, increased oil consumption, and rising gasoline prices.

The Administration corporate tax cut, one of the largest in U.S. history, also strongly benefitted the energy industry, as it did other industries.

From the moment he chose to run for President, Trump has embraced the new shale revolution in the U.S. as a major contributor to the country’s economic growth and energy independence.

Increasingly, Trump has become the top promoter for increasing exports of U.S. Liquid Natural Gas (LNG) to world markets. He openly threatened to place economic sanctions on Germany if it went ahead with the deal for Russia’s new Nordstream 2 pipeline, that would nearly double natural gas supplies from Russia, Germany’s largest supplier.

As most observers noted, the U.S. sanction threat was accompanied by the offer of U.S. LNG to Germany and Europe, as a replacement of Russian gas.

No doubt that Trump’s bullying offended European sensibility, but despite the German protest regarding outside interference in its domestic economic affairs, and its intention to complete the Russian pipeline, Germany is quietly building up LNG importing facilities, "as a gesture to American friends."

Most energy experts agree that it is inevitable that U.S. LNG will eventually become a component of European markets, despite its significantly higher price to Russian and Norwegian gas, if for no other reasons to keep the peace with America, Europe's largest ally, and assure Europe’s access to the U.S. market.

This will also serve to assuage the U.S. complaints about unfair trade. It matters little that the U.S. trade deficit with Germany centers on its auto industry rather than energy, if the sale of natural gas serves to reduce the U.S. trade deficit.

Related: U.S. Will Not Release Oil From SPR To Offset Iran Sanctions

The same could be said about the U.S./China trade deficit. China, the largest energy consumer, is the one country where solutions to the trade deficit is clearly at hand, involving increased U.S. LNG imports. China already has a long-term, 20-year deal to import LNG from the leading U.S. LNG company, Cheniere Energy.

China could easily reduce the amount of gas imports from variety of other suppliers (i.e., Qatar, Australia, New Guinea, Iran, Russia) and replace these with U.S. supplies. That would be a near costless transaction for China, as it is already paying other producers for natural gas and LNG supplies.

Consider the effects of a possible LNG deal could have on the trade dispute. In terms of the current deficit, China sales to the U.S. is estimated at around $350 billion, while U.S. sales to the China is around $150 billion.

Last May, the China signed a $25 billion deal for importing U.S. LNG. If we assumed that in current negotiations the two countries could strike a modest deal for another $25 billion in annual U.S. LNG sales to China, U.S. sales to China increases to $200 billion, reducing China’s surplus to $300 billion.

If that were to take place, the trade deficit would reduce to around $100 billion, and Trump would no doubt return to the election campaign trail to boast of the first U.S. trade victory over China.
Oilprice.com
The most vital industry information will soon be
right at your fingertips

Join the world's largest community dedicated entirely to energy professionals and enthusiasts
Join Today

The risk to this scenario is the presumption that everyone involved really wants a solution to the trade dispute, but there is widespread suspicions that U.S. tariffs on China may be less about fair trade and more about economic warfare to contain China’s growth.

George Friedman's "Geopolitical Futures" recently noted that "The U.S. is beginning to see it [tariffs] more as a strategic opportunity to contain Chinese assertiveness than as a play to invigorate U.S. manufacturing."

On various Asian websites, there remains a stalwart band of journalists, led by Pepe Escobar, who maintain that Europe, Russia, China, and Iran will band together to thwart U.S. sanctions on Iran, and that 'Iran's oil sales will be totally unaffected. They also hold strongly to the opinion that China will not yield to U.S. threats and ultimatum.

This despite the fact that major energy companies, like Royal Dutch Shell and Total have already fled Iran in fear of US sanctions, while major countries are severely cutting Iran imports.

Sanctions against Iran will certainly reduce its exports substantially, with the worst case estimates of a loss to the markets of 1.5 million barrels of oil per day. This will also open opportunities in under supplied markets that will almost certainly be exploited by U.S. and other competitors.

Currently, Japan and India have agreed to major reductions of energy imports from Iran. Recent news has it that Sinopec, China’s largest oil and gas refiner, under threats of US sanctions, also agreed to severely cut imports from Iran. It's no secret that nearly all of Iran’s competitors, it's OPEC 'partners', will go after those under supplied markets, as will the U.S.

Some observers believe that because the upcoming election is uppermost in the minds of both U.S. political parties, a trade victory with China is extremely important to the Republican election campaign. If so, their thinking goes, a deal will result in easing tariffs with China by November.

Trump himself recently stated that he's ready to talk trade with China, but continues to add the qualifier, "not now." Many Trump watchers interpret this to mean that 'getting tough with China' plays well to Trump's base, boosts the Republican election prospects, and afterwards a trade deal is likely to be struck.

Any trade deal with China could also be used by the U.S. as a template for deals with Japan, India, and South Korea, the next largest Asian importers of natural gas. It can hardly be coincidence that, as in Europe, these energy importing countries are threatened by US tariffs over unfair trade.

However, Geopolitical Futures states that "the broad impression in China appears to be that Trump isn’t actually interested in a deal – certainly not one that China could accept – and that this is just the first major salvo in an emerging Cold War and that instead ... the world needs to get ready for a new cold war with China.

Related: Gazprom's Bid To Maintain European Energy Dominance

In a recent speech, Richard Haas, president of New York-based think tank Council on Foreign Relations stated that "...the Trump administration initially focused just on trade, “but now it’s broadening, and it almost seems as if the administration wants to have something of a cold war with China.”

What about Venezuela, a country estimated to have the largest oil reserves in the world, also laboring under U.S. sanctions? It's also a country about which the Administration has made no secret of its plans for a possible U.S. military invasion to topple the Maduro government.

Why go public with that story now, with only a little more than a month towards U.S. Congressional elections?

There is widespread speculation that this announcement may be a trial balloon, as part of the preparation for laying the ground work for an invasion aimed at bolstering Republican election prospects. To date, there has been no sign of opposition to these threats from Democrats.

Conclusion:

It's no accident that sanctions are aimed at the U.S. largest energy competitors, Russia and Iran, nor is it coincidence that the largest energy importers, Europe, China, Japan, south Korea are also under threat of U.S. tariffs or sanctions.

Instead, it clearly shows that the U.S. is using the threat of economic warfare and possible military conflict as leverage to open markets to the newest player on the world's energy market, American LNG.

If the U.S. is successful in these deals, it's likely that in future, there will be a parallel attempt to make inroads for US crude export to the very same oil importing countries, relying upon the very same LNG game plan.

By Robert Berke for Oilprice.com

[fjgooner] 07/10/2018 13:16

@ 3649,

If Barclays is right that near-term peak Brent price will be $90 as we approach November 4th, then that is when RDSB reaches its peak price in the near-term (given the way the 2 have historically tracked).

Should that prove to be the case, then I will seriously consider trimming back my position (by between 50% and 80%) as we move into winter, irrespective of whether a 2018 target of £30 is hit and redeploy back into the stock at a later date.

The metric Shell supplies for 2020+ revenue models is always predicated on Brent at $60 (2016 equivalent).

So a Brent price as low as Barclay's 2019Q3 $70 is no problem at all, but I'd rather go into 2020 with an additional percentage of equity if price movements permit.

It should be an interesting 4 weeks ahead of us.

FJ

[the grumpy old men] 07/10/2018 09:07

Why The Oil Price Rally May Soon End
By Nick Cunningham - Oct 03, 2018, 6:00 PM CDT oil rig

Oil forecasters are falling over themselves, publishing new estimates on how high they think prices can go. The rise of Brent to $85 per barrel has forced a rethink among a long line of commodity analysts and investment banks, and the predictions for $100 oil are proliferating.

However, not everyone agrees. Barclays decided to take a contrarian approach, and went against the grain in recent note with its prediction that oil prices will begin to fall before the end of the year. “The recent increase in prices has gone too far, in our view. Although prices may continue to rise from current levels in October, the market is ripe for a correction,” the bank said in a note.

Before that, however, prices could rise in the near-term. But that may only accentuate, or at least bring on, the price correction. “The rally could go even further this month, leading US policymakers, consumers, OPEC, and Saudi Arabia to react,” Barclays said in a note.

There are several reasons why the investment bank says oil prices will fall. First, demand will “soften” at a time when supply should continue to rise. That seems to be the same fear that Saudi officials currently have, at least according to recent press reports. Saudi Arabia is hesitant to increase production now because the oil market will hit a seasonal lull this coming winter, which could take the edge off of the market.

The latest OPEC report suggests that the slowdown in demand due to seasonal factors, combined with rising non-OPEC production, could translate into a decline in the “call on OPEC” by 600,000 bpd in the first half of 2019 relative to August levels.

Saudi Arabia may unilaterally increase production in order to fine-tune the market, hoping to offset Iranian outages, but it did not want to pressure the entire OPEC+ group into increasing output. A formal increase in output may only lead to a situation of oversupply, rising inventories and another downturn in prices, Saudi officials reportedly fear.
Related: $200 Billion Saudi Solar Megaproject Might Never Happen

Moreover, it would create a situation where OPEC+ might need to agree to cut production once again at some point next year in response to the glut, and getting more than a dozen oil-producing countries to agree to any change, let alone a production cut, takes a tremendous effort. Thus, OPEC+ did nothing at its latest meeting in Algiers, expecting the market to sort itself out by early next year.

Nevertheless, the market looks rather tight over the next few months. Iran may have already lost about 1 million barrels per day in oil exports, compared to its April peak. News that China may be forced into cutting imports from Iran raises the odds that Iran could lose much more supply in the weeks ahead, forcing oil prices to move even higher as global supplies start to feel the strain.
Oilprice.com
The most vital industry information will soon be
right at your fingertips

Join the world's largest community dedicated entirely to energy professionals and enthusiasts
Join Today

However, that merely increases the odds of a reaction from the U.S. government. Barclays believes that the Trump administration will either issue more waivers to countries from secondary sanctions, allowing them to continue importing Iranian oil, or absent that, the U.S. could release oil from the strategic petroleum reserve (SPR). “We expect that the White House and State Department will issue significant reduction exemption guidance before the November 4 deadline,” Barclays said. That could include India, Japan and South Korea.

Still, because confrontation with Iran is a high strategic priority for the Trump administration, and maintaining the integrity of the SPR does not seem to garner as much enthusiasm from inside the White House, it would seem that an SPR release is more likely than Iran waivers.
Related: $200 Billion Saudi Solar Megaproject Might Never Happen

Another reason why Barclays says that the current oil price rally may be overstretched is that the bank is not as skeptical of OPEC’s spare capacity as some other market watchers. They pointed to the potential restart of the Neutral Zone oil fields on the Saudi-Kuwaiti border, which is often not included in spare capacity estimates thrown around in the press. Those fields could produce as much as 500,000 bpd. Iraq too has ramped up production over the past few months, an increase that few analysts saw coming.

Finally, Barclays says the macroeconomic picture “continues to deteriorate,” with an end to global synchronous growth and turmoil in emerging markets. EM countries face a “one-two punch of weaker currencies and higher oil prices,” the bank wrote. The result could be that oil demand continues to “miss expectations.”

Barclays says oil prices could potentially rise towards $90 per barrel as the November 4 deadline for U.S. sanctions on Iran approaches, but prices decline thereafter. The banks sees Brent crude averaging just $77 per barrel in the fourth quarter, down significantly from the price today. From there, Brent continues to fall, averaging $75 in Q1 2019, $71 in Q2 2019, and just $70 in Q3 2019.

Absent a major supply disruption, Barclays says oil prices will be “anchored̶1; below $80 per barrel.

By Nick Cunningham of Oilprice.com

[adrian j boris] 06/10/2018 08:56

Billions in oil-company buybacks down the drain? Yes, Citi says

Alex Nussbaum, Bloomberg 11:01 pm CDT, Thursday, October 4, 2018

Oil storage tanks line the Port of Corpus Chrisit, Wednesday, March 7, 2018. ( Mark Mulligan / Houston Chronicle ) Photo: Mark Mulligan, Houston Chronicle

Photo: Mark Mulligan, Houston Chronicle
Image 1 of 23
Oil storage tanks line the Port of Corpus Chrisit, Wednesday, March 7, 2018. ( Mark Mulligan / Houston Chronicle )

U.S. oil drillers started the year ushering in a new era of shareholder returns with promises of billions of dollars in share buybacks. To that they added debt repurchases, then shoveled money into drilling budgets as they raced to sink more wells.

None of it mattered, according to Citigroup Inc., compared with the price they could collect for their oil.

A study of 31 exploration and production companies found the “predominant variable” for the best-performing stocks in the group this year has been the price companies realized for their barrels after adjusting for shipping costs and other factors, Citi analyst Robert Morris said in a note to clients Wednesday.

SUPPLY: Crude inventories jump

Despite a lot of earnest talk from oil executives this year about shareholder returns and fiscal discipline, little else -- not cash flow growth, production and capital-spending guidance, debt metrics, dividends or buybacks -- was a “distinguishable factor” in performance, Morris wrote.

“Oil prices reign above all,” he concluded.

“Interestingly, return of capital to shareholders has not exhibited any clear correlation since Q2 earnings kicked off,” Morris wrote. Companies that announced share repurchases as well as the three that increased dividends underperformed a Citi index tracking the sector.

“Thus far in 2018, E&Ps with higher oil-price realizations and higher oil-production mixes have generally outperformed,” Morris wrote. “No such clear pattern exists with the other operating parameters.”

[waldron] 05/10/2018 17:53

at present all is going to schedule

[imperial3] 05/10/2018 17:48

£30 looks a long way off.

[waldron] 05/10/2018 17:35

waldron
16 Aug '18 - 14:34 - 3451 of 3480 Edit
0 4 0
Should be fun to chalk it up BOX BY BOX

2375 to 2475p
2475 2575p end august 2018
2575 2675 end october 2018 $$$$$$$$$$WE ARE HERE TODAY$$$$$$$$$$$$$$$$$$$
2675 2775 end december 2018
2775
2875
2975 to 3075p xmas 2019
3075
3175
3275
3375 to 3475p xmas 2020

A SLOW CRAWL TO FJGOOONERS DREAM TARGET PRICE OF 3400p which may well be changed if convincingly surpassed before CHRISTMAS 2020

[waldron] 05/10/2018 17:29

Total
56.04 -0.05%


Engie
12.645 -0.47%

Orange
13.655 -0.55%

FTSE 100
7,318.54 -1.35%
Dow Jones
26,374.77 -0.95%
CAC 40
5,359.36 -0.95%


Brent Crude Oil NYMEX 84.45 -0.48%
Gasoline NYMEX 2.09 -0.93%
Natural Gas NYMEX 3.14 -1.57%



BP
588.5 -1.64%


Shell A
2,598 -2.22%



Shell B
2,635 -2.19%


SO THE PREMIUM IS 37p and we have slipped back into the 2575p to 2675p BOX