Member Info for Boyobach

Rather disappointing afternoon - should have closed above 930 given firmer OP. Even 950 would have been plausible on recent performance:
https://invst.ly/scxpd
Better than BP percentage wise, however. Let's hope onward and upward from here.

That last post of mine was purely in response to Neversellshell's theoretical query -

Ha! Now we enter the realms of smoke and mirrors. Char would be right to be sceptical about this next bit of speculation.
This chart - rebased to an arbitrary date in late Jan 2015, shows the relationship between RDS and Brent over approx the last six years:
https://invst.ly/scvom As you can see: the relationship is quite tight - except when it isn’t !
From this, it appears that, under ‘normal’ circumstances, RDS tended to be around 2500 @ $70 Brent and around 2300 @ $60 Brent (these are very generalised approximations!)
Today, RDS appears to have dropped about 600 below where we might have expected it to be at the current OP (if the relationship was linear - which it won’t be!!). Bear in mind also that this has much to do with the cut in divi and a market pull towards the most recent knife drop to 890.

From there you can draw your own conclusions. But, in my view, that 600 discrepancy could be very slow to dissolve away, given the clouds around fossil fuels, RDS transformation, the instability of OP and the divi cut. So, whilst RDS used to command around 2300 when Brent was $60, 1700 would represent a simplistic and direct estimate based on today’s price relationship. Reinstatement of the divi should boost that of course. But, if Brent were to reach $70 then that would imply vastly higher levels of market confidence and an assumed restoration of the divi - not that I imagine we’ll see that within the next two years - and I think RDS could well fully recover to 2500 in those circumstances. You could take a poll of all the other regulars here and get a consensus.

Hopefully it was the bottom. Tracking OP quite closely today however: https://invst.ly/scugl

I’m seeing a few of these since last night:
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So I guess Rach is still pushing Char’s buttons?
It’s classic trolling by Rach to get people to filter Char - the more he responds, rather than talking about RDS, the fewer will bother with his posts. By rising to the bait, Char is just doing what she/he wants. Pity.

With the gaps of the last couple of days filled, RDS has been making reasonable progress this morning. Something of a chart data anomaly in the ‘high’ price for 15.00 of Friday - it appears as 990, which is obviously wrong as the intraday high has been given as 912.7.
https://invst.ly/scsi4

I guess RDS may well level off - but hopefully above 930.

The gap is simply the space between one day’s trading range and that of the previous day (traders also look at intraday gaps). Gaps stand out on a candles chart, so are easy to spot.

RDS had a high of 912.7 on Friday and opened today at 927.8 - so there was a gap of 25p. The general rule is that gaps are invariably filled at some point: some will tell you that they are always filled, I don’t subscribe to that view because there are circumstances where the gap is part of a very rapid series of rising/falling price movements. You’d need to read on-line notes on gap trading to discover more.

In order to fill a gap, the price must obviously return to cover it. This does seem to happen in the vast majority of instances that I have seen. Today the gap was filled within about an hour (I’m ignoring the 1p shortfall) - but some gaps remain unfilled for weeks or months.

RDS gapped down massively from 1535 on March 6th (many shares did the same).
That gap should eventually fill unless RDS ultimately fails to recover. So, from a technical viewpoint, 1535 is as near to a certainty as you can get.

A finish below Friday's close would be bad news.

Shell and BP gapped upwards at the open this morning - which is obviously a good sign - but let’s hope it gets filled today rather than on a later date.

No wonder you are pretty gloomy about RDS, Char.
It is as well equipped as any of the majors to come through all the challenges but I'd have to accept that nobody knows for sure how the story will unfold and over what timescale. I'd be extremely pleased if the sp gets to £17 in the next 12 months - it is conceivable but I'm not counting on it. GL

Fully agree Marcus.

Dreamingof: Saudi budget till 2023 announced at $50, which by your analysis should make Shale happy.

I guess that could easily be an average over three years in reality:
Year one say $40, year two $50 and year three $60 for example. A bit extreme maybe.
I’ve seen those numbers somewhere….oh yes- the RDS forward estimates in the other thread.
That scenario would squeeze shale. It isn’t ever going away but consolidation should bring the capital discipline needed to make the survivors (and the majors in the Permian etc.) more profitable.

I think 'years' sounds a bit pessimistic Char, although I do think there's little chance whilst Brent is south of $50 and more than one year would take it into years technically. It isn't just the price of oil, of course, it's the volume being shifted - and that looks like it could stay quite low for a while. But a lot can happen in a few months where oil is concerned.
I'm assuming you may have got a holding stranded at above £17? Or did you bail out on the way down?

... if oil moves back to $100 a barrel shale producers are back in business.
I'm not sure you grasp the problem.

If oil moves back to $100 there isn't a problem to grasp is there?
If 'Big Oil' controlled shale they would impose capital discipline - no more drilling and pumping for peanuts.

And just to add to that. RDS guidance is, I believe, based on the average Brent price for the full year. According to my calculations, even if Brent averages $35 from now until Christmas the ' whole year' average will come out at just over $40 - so it should ultimately be $5 above the basis of their guidance. DYOR of course.

I’m not sure that everyone fully grasps the significance of the Saudi + Russian led battle with US Shale producers (as opposed to US conventional producers). With shale, the essential elements are high capital costs, low margins and rapid decline of each well's production. The latter point is critical - to simply maintain production at sufficient volumes to pay off debt - shale wells must be replaced at a high rate. It’s an accelerating treadmill that they can’t get off unless they are pushed off it. More drilling - cap-ex - is necessary for ever decreasing returns. The lower the OP the more they need to pump - effectively pushing OP down further and the more they need to spend on drilling - further reducing their margins. They really are doomed by this black-hole of futility and so are their investors.
Until the shale industry is put out of its misery, oil prices will not recover to viable, sustainable and healthy levels. If we care about the planet (meaning humanity rather than the extremely isolated rock we involuntarily find ourselves on) oil should not be cheap - it should be extremely expensive so that the use of it is discouraged and RDS investors can prosper without guilt.
If OPEC doesn’t break shale whilst covid gives it the opportunity then OP will never recover above the levels needed for shalers to scratch a living by pumping for a pittance ie $40-$50. The Saudi’s know that this is the price range that keeps Shale alive - like a sick man in a coma - so they will be trying to do the humane thing and turn the life support off. In this they are abetted by the current US regime, which needs oil to be very cheap and which cares little for the fact that many US jobs have been nurtured and lost in an entirely wasteful and polluting endeavour.

Definitely not WTI which is very US specific, substantially 'land locked' and - certainly last April - a physical deliverable (hence the price crash into negative numbers when one contract expired)
I think Brent is correct - RDS refer to it in their reports, like these two examples from the June update:
CFFO price sensitivity at Shell Group level is still estimated to be $6 billion per annum for each $10 per barrel Brent price movement Note that this price sensitivity is indicative, is most applicable to smaller price changes than those in the current environment and in relation to the full-year results. .....

The following price and margin outlook have been assumed for impairment testing: Brent: $35/bbl (2020), $40/bbl (2021), $50/bbl (2022), $60/bbl (2023) and long-term $60 ......

When were Goldman Sachs analysts last right about RDS I wonder?
They certainly haven't been since April, when they said that ‘Big Oil’ doesn’t cut dividends in tough times and economic downturns ..... Highly switched-on chaps obviously - and never mind about the issues of transitioning to low carbon whilst revenue has cratered.
According to the FT, 20 analysts offering 12 month price targets for Royal Dutch Shell Plc have a median target of 1,523.24, with a high estimate of 3,095.97 (bonkers??) and a low estimate of 1,048.49. (not too inspiring! ). The median would be good enough for me, anything more would be a bonus.
https://markets.ft.com/data/equities/tearsheet/forecasts?s=RDSB:LSE

Yes Rangor - CWR has been tricky but in a good way. I've taken profits sometimes waaay too prematurely! Ha! It does tend to cycle by about a quid, obviously went much wider than that in July when IPG sold their second and final batch. https://invst.ly/sc7ge
I can see your logic regarding 550. Until Friday I would have thought 530 was easily possible but that's starting to look unlikely now. Best of Luck.

Considering the drama over on the RDSb board, I expected to see a bigger difference between the major and G over the week. Only goes to show what Genelians take in their stride, with both companies around 7% down since last Friday’s close :
https://invst.ly/sc08h

Yes- I'd have suggested CWR a while back - but you already knew that. However it has gone bananas in the last two days and could well flop back - probably will, which just might make it interesting for you. Easy for me to say as I'm down to an average price of well below £2.50 so have even stopped bothering to trade it.
I have added RDS over the last two days now - it may have turned the corner this afternoon. But with oil you never know.
GL whatever you do.

Shell does not ordinarily track OP particularly closely but, like most oil companies, the sensitivity often gets greater at times of weakness. And sometimes it’s not entirely clear which is tracking which.

The brakes got applied to yesterday’s downward trend this morning, despite broader market pressure (apparently because someone caught COVID-19 and may have more time to play with Twitter). However, once the US market got going, both Brent and RDS swung into an upward trend. I’ll be watching the RDS lows on Monday for early signs of a reversal:

https://invst.ly/sb-z3

Enjoy the weekend.

https://www.youtube.com/watch?v=h4O1nsc_z8s .