Member Info for Boyobach

Gap to fill around 947.

I think the current RDS price is simply the result of straightforward market dynamics, which would include any hedge fund activity. Almost all stocks are down today. As I pointed out just yesterday, RDS, BP and Chevron have tracked each other downwards since mid June, whilst OP has remained in the region of $42 or better. I don't think there's an organised group driving down the price of several oil majors. https://invst.ly/sh2pf

Lack of US stimulus and latest covid news, restrictions etc hitting the markets

I think you are wise to be cautious, Grippa. Look at the sp's of RDS and BP today.
I don't think the US election will change the outlook for RDS that much - the Dems are really Republican-light, still very much in the pocket of big business. A tilt towards green might dent the US Oil Cos and a curb on Shale would be no bad thing for RDS or the environment.

Correction and apology: Brent 43 wrongly marked on chart in previous post:
https://invst.ly/sgtxi

I'm with Neversellshell on the probable outlook, Grippa. However, I like to plan and prepare for the worst.
RDS has faired much worse than I anticipated back in June - so you learn from your mistakes.
In retrospect it was June 11th that the three majors I've talked about today RDS, BP and Chevron all started a steep decline despite Brent going the opposite way: https://invst.ly/sgtv2
That divergence must be corrected and resolved at some point if RDS and the others are to recover.
I recognise that I probably can't rely on the one tranche I bought a fortnight ago at near £9 to magically eliminate my total paper loss in RDS in a few months - so I'm probably going to have to roll my sleeves up and get trading, possibly by scalping at lower margins than I'd have bothered with previously. Well, in lockdown I guess you need a hobby - though it isn't what I'd have chosen. ATB and GL guys.

I can recommend this pdf compilation of related news briefs:
www.arlis.org/docs/vol2/Oil_GasNB/2020/Oct_1_2020.pdf

Nah, not a contradiction really Grippa - provided the sp is moving in the right direction. I'm not 'head in the sand' about oil though- yes it's essential (always will be for a variety of uses) but we have to stop burning the stuff. It's got a couple of decades ahead of it as a key energy source and that's long term enough for me. On a more practical note, I realise that I should have traded RDS rather more than I anticipated when I parked some cash in it a few months back!! I should have got out when it dropped below 1300 in late June - the divergence with OP was a very clear signal that I failed to take proper heed of. No fool like an old 'un. I won't stick with it if the divergence continues, however.

I'm inclined to think BP's recent long-term Energy Outlook is broadly correct but it apparently doesn't go down well in some circles (article):
Peak demand has been on the oil industry’s radar for some time but mainly as a distant event with vague implications. BP tried to change that last month with a bearish long-term forecast for oil demand that said peak demand is either here now or will arrive in the next few years.
https://www.forbes.com/sites/daneberhart/2020/10/12/bp-ignores-oil-market-fundamentals-in-latest-energy-outlook/#789e99bf69da

The FAANG stocks are interesting in terms of Long Term visibility. There's a lot of discussion here about RDS in the LT because of the necessary transition to low carbon. Yet, by comparison to the so-called FAANGs (the acronym doesn't include Microsoft of course, nor does it identify Alphabet correctly) RDS could, oddly enough, be viewed as a company where the future is somewhat more predictable. For Apple there's the question of the proprietary nature of its hardware and software. It really isn't a particularly inter-operable system which makes it a consumer orientated business with a high dependence on prevailing fashion - the business rather depends on whether it remains 'cool' to own an i-phone. I personally find Apple products deeply unsatisfactory but for those who like them they are the only IT they will touch - this is both a strength and a weakness. The eponymous core of Facebook is a non-essential service that tends to be identified with a particular age group and their parents - it is also vulnerable to fashion trends - which is why the acquisition and subsequent development of WhatsApp was probably a smart move. I'd suggest that, of the FAANGS, Apple and Facebook are perhaps the most unpredictable.

Here are RDS (candles), BP (yellow), Brent (green) and Chevron (pale blue) rebased to late Feb, just prior to the Covid slump:
https://invst.ly/sgkqk
The key take-aways for me are:

The close similarity in performance between BP and RDS, which tends to indicate that RDS is not behaving significantly differently to its UK peer.

The progressive weakening of the non-US oil cos relative to OP since their 1H results.

The significant difference in the performance of the US peer - where weakness appears to have been delayed by a quarter.

The gradual loss of BP’s edge over RDS as the months have gone by, so that it is now trailing over the last two weeks in this comparison (15’view): https://invst.ly/sgkq-

It is also apparent that, apart from the brief intra-day rise to 1000 last Friday, Shell’s sp has made no material progress since it fell to 890 a fortnight ago. The increase since then is proportional to the improvement in OP and can’t really be taken as a reflection of fundamental improvement in the market’s assessment of the company.

Regarding that Oil Price article: It'll be interesting to see how effective OPEC's management of OP actually is over coming months.
There are clearly some member states that barely pay lip service to the 'agreed' quotas, Iraq being a significant 'offender' from that pov. Russia too is something of a loose canon. Outside of OPEC+, it remains to be seen what production levels the hard-pressed US Shale independents will settle at. Fracked wells may decline quickly but they apparently have plenty of DUC's that could be brought into production. The KSA may have the power to bring OP down but they seem far less able to raise it. For it appears that when the Saudi's limit supply others effectively take their market share, which KSA then regain by overproduction: it's caused a downward spiral which may have levelled off but which shows no real prospect of reversing.

Have you got links or references for those analysts at £5 Char? I'd be interested in checking out their rationale. Cheers.

Mehmehmeh: Libya and Norway causing oil decline….. (from the other thread)

Yes: GoM also resuming. The world is awash with oil and RDS is possibly more sensitive to the price now that it was when it first fell to 890 in March.

A slight lag but RDS is otherwise following Brent quite tightly -15' comparison: https://invst.ly/sfqyq

Ha! I've seen a few of these cropping up on my LSE screen over the last day or two and now on this thread :
'This message has been filtered, please adjust your filters to view'
I guess I haven't missed anything? It's an excellent feature on LSE - shame it doesn't work on the ads too!

Nice reply Char and definitely not pessimistic relative to my own thoughts. Over the weekend I think I suggested up to £16 if Brent averages $47 through next year - so we're not far out of kilter. As others say, it is all guesswork but you actually do have to have some kind of target in mind if you are invested. Cheers.

Ha Guys !- I was actually asking Char. He has a fairly pessimistic view which seems to attract some trolling and I wondered what he really thought. Meanwhile RDS is currently a nominal £9.50 share apparently tracking Brent quite closely. Not much else going on since the drop below a tenner.

Just tracking Brent (down from Friday's close) this morning. Could be a boring week.

Correct about £20 Char - but I don't think you read Neversell's post properly - As he reminds us: 'take everything on here with a large pinch of salt.'
Question from me is: what is the best you expect from RDS sp over the next 12 to 18 months and what is the worst?

In case you didn't see this (Reuters 1st Oct):
U.S. oil producers on pace for most bankruptcies since last oil downturnThe United States grew to become the world’s largest oil producer at nearly 13 million barrels per day (bpd), led by shale companies. However, those companies, in order to maintain high levels of production, need to keep drilling new wells to offset the swift decline rates from each site. Many shale producers took on heavy debt to finance their operations.
https://www.reuters.com/article/us-usa-shale-bankruptcy-graphic-idINKBN26M7EM