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https://ir.darktrace.com/press-releases/2022/7/14/432

Speculating on the impacts of a Russian oil price cap on the world economy is utterly pointless. If the complex practicalities of introducing a price cap cannot be :addressed before attempting implementation in the first place, how likely is it that a price cap is going to work:

https://oilprice.com/Energy/Energy-General/Why-Putting-A-Price-Cap-On-Russian-Oil-Wont-Work.html

Interesting for those naive enough to think that Darktrace needs to build links with the highest levels of the security services in the US and UK. The links have been there since the inception of Darktrace & are regularly reinforced.

https://declassifieduk.org/the-son-of-julian-assanges-judge-is-linked-to-an-anti-data-leak-company-created-by-the-uk-intelligence-establishment/

PussyGalore, CR888, HereKittyKitty great to see suddenly posting again. Even JayneC might make a comeback!

It is worth looking at this Update Note from a different perspective. Not looking at what is not included, but at what is included. The figures are subject to finalisation of the 2nd Quarter 2022 results to be published on July 28, 2022. An immense company like Shell has produced this update on only the 5th trading day following the end of the half year to which the figures apply.

So for now the figures are released largely in indicative ranges. Notmyjob is right in that many of the figures are politically sensitive and great care will be taken over what is released and when. But there is great news there - the reversal of impairments adds straight to the capital value of the company. A major boost for the buybacks, as fewer shareholders will own more of a more valuable company - something of a masterstroke albeit a predictable one.

Refining margins tripling is great, but contentious news, and Biden is already making this clear. He wants refining volumes up and margins down & has gathered the heads of the oil-majors to make this clear to them. He wants volumes up due to the lost refining capacity that Russia has provided being lost - this is a major issue that is not currently being discussed much publicly.

Pernix - I'm not sure where this update details "promises of Dividend hikes & more share buybacks." It only states "The share buyback programme of $8.5 billion announced for the first half of 2022 was completed on July 05, 2022." Perhaps you are confusing this Update Note with the 1st quarter Results Announcement on May 5th 2022. " Who knows"as you said a couple of weeks ago with reference to whether a recession was in the offing.

Should say "Billion."

The overdue $3.5 to $4.5 reversal on impaired assets looks to have been clearly understood and gone down well with fund managers etc.

Worth reading "Blood and Oil" by Hope and Scheck, which gives a great background as to whether Mohammed Bin Salman of Saudi Arabia has spare capacity and how it will be used.

Sanctions are not currently working exactly as intended:

https://www.nytimes.com/2022/06/21/world/europe/ukraine-russian-oil-embargo.html

https://www.theguardian.com/business/2022/jun/26/concerns-india-back-door-into-europe-for-russian-oil

Pernix - quite a change of view in only 10 trading days! Masses of views, opinions and forecasts from you that most will struggle to make any sense of. But don't lose hope altogether - if you make enough statements, one of them might be right!

A bit of a threadbare series of views. For instance there is no analysis of the impact of continuing buy-backs on the ROE equation:

https://simplywall.st/stocks/gb/energy/lse-shel/shell-shares/news/shell-plcs-lonshel-fundamentals-look-pretty-strong-could-the

Boyo - I think there is a change in reality taking place & this is one of the causes of the significant SP drop. Central banks increase interest rates, people borrow less, demand in the economy decreases. Less money is chasing goods and services so the price of them stabilises/falls and subsequently inflation starts to fall.

But, deeper than that the oil price is a primary driver of Consumer Price Inflation (CPI). There is going to be a significant lag before the supply side catches up with demand and as a consequence starts to reduce the oil price. Everyone wants to reduce reliance on Russian oil and gas supplies, but to accomplish this, for now there is a gap in supply that is pushing the oil price higher & higher!

The obvious alternative to increasing the oil supply is for governments to reduce demand for it. And governments are now increasing the cost of money & focusing on reducing headline inflation & risking recession to do so. These actions directly impact the oil price.

Also there is a significant war risk premium, above "normal" that is bolstering oil prices at the moment. If say hypothetically Russia captures the whole of Luhansk and Donetsk, there is a vague possibility that they might consider that they have achieved their objectives & "cease" hostilities, other than defending themselves from Ukrainian attacks. Essentially this happened with the annexation of Crimea. Would the West then ease sanctions etc.

Pernix: What source are you using to state that the "Stock Markets reflecting on lower economic growth everywhere but still growing!" This conflicts with the Office for National Statistics releases detailed below:

GDP monthly estimate, UK : April 2022 - extract:
Gross domestic product (GDP) fell by 0.3% in April 2022, after a decline of 0.1% in March 2022.

GDP monthly estimate, UK : March 2022 -extract:
Gross domestic product (GDP) fell by 0.1% in March 2022, after no growth in February 2022 (revised down from 0.1% growth).

You also state glibly "Recession fears are exactly that fears in the future!" You have shown previously that you have only a very superficial grasp of recessions - stating for example that the UK was subject to an economic recession in 1987. There was a recession in the early 80's, but not in 1987.

Because it takes two quarters of zero or negative growth for the economy to be statistically proven retrospectively to be in a recession, the point of entering a recession cannot be confirmed (usually by the ONS) until over 7-months later. This means that we could easily be in a recession right now, and this is what is spooking the markets, along with interest rate rises to curb high inflation, and the delicate balance between these rises & the concern that they may choke off any post-COVID recovery. Or the interest rate rises are insufficient, or too late & inflation runs riot in the economy.

Apologies - the figures above are extracts from the Office for National Statistics releases.

A recession is defined as two consecutive quarters of zero or negative growth:

GDP monthly estimate, UK : April 2022 - extract:
Gross domestic product (GDP) fell by 0.3% in April 2022, after a decline of 0.1% in March 2022.

GDP monthly estimate, UK : March 2022 -extract:
Gross domestic product (GDP) fell by 0.1% in March 2022, after no growth in February 2022 (revised down from 0.1% growth).

If when figures are released there is zero or negative GDP growth in May 2022, it will be the 4th month in a row of zero or negative growth in the UK economy. Financial institutions, markets and governments would be derelict in their duty if they did not flag up the direction of travel towards a recession & the part played in this by inflation, food, energy prices etc etc.

Probably the biggest winners in this are the trophy manufacturers:

https://cyberdefenseawards.com/global-infosec-awards-for-2022-winners-by-company/

As BvB stated recently - once crude oil is refined you cannot tell where it originated from:

https://www.reuters.com/markets/commodities/exclusive-russia-has-no-extra-oil-sign-deals-with-two-indian-buyers-sources-2022-06-08/

https://www.telegraph.co.uk/business/2022/06/02/russian-oil-tankers-go-dark-putins-latest-sanctions-busting/

With the oil sanctions against Venezuela, one of the sanctions-busting games played was to transfer cargoes of crude from ship to ship at sea. Once the crude oil is refined by a country & company that does not ask too many questions relating to it's origin, it can be sold on in the markets with impunity.

BBC - widen your horizons, there are innumerable factors that will influence the Darktrace's share price. Recovery of the Tech sector both here and in the US. A more benign outlook on inflation & interest rates. Availability of people with the expertise Darktrace needs at the labour price they can afford. Evidence of a dominant competitive position being established in a hugely competitive market-place. A pipeline of regular and widely acclaimed blockbuster products. Maintenance/enhancement of high-margin business. Avoidance of cyber-security price-wars. This list is meant to be illustrative rather than exhaustive.

The Q1 2022 Results Press Release stated - "With the current macro outlook and subject to Board approval,
shareholder distributions for the second half of 2022 are expected to be in excess of 30% of CFFO." So, as you imply there is built in flexibility, giving the scope to increase the dividend more significantly.

There is a lot of pressure from the US oil majors for Shell to revise its dividend offering in an upward direction. Also with UK Consumer Price Inflation (CPI) at 9.0% in the 12 months to April 2022, effectively Shell investors are receiving around 5% less than they did last year in terms of Shell dividends. No big surprise that investors are unhappy with this, but a significant dividend increase is a big part of the post-COVID jigsaw.

There is a converse argument that Occidental's share price performance over the last year has managed to bring it into line with Shell's performance over the last 5-years. Shell has made massive buy-back purchases of shares that have buoyed the share price in the interim, following the dramatic dividend cut that had demoralised so many investors.

But, when Shell raises the dividend level significantly (it has to remain competitive with its peer group to attract investors), and the share price duly rises, the level of buy-backs, reduction in debt, streamlining of capital etc etc could be seen as a strategic masterstroke.

OXY +41.36 (141.69%)gain over the past year
OXY+9.54 (15.64%) gain over the past 5 years

SHEL +1,048.70 (75.78%) gain over the past year
SHEL +326.00 (15.48%) gain over the past 5 years

Alphabet announced their 100,000th drone delivery in August 2021, so there is a lot of pressure to develop drone delivery across the whole delivery sector. Probably, robots don't complain about pay and conditions yet - so a big incentive here!

Can't help thinking that Deliveroo might well tie in with Amazon's delayed Prime Air offering when it becomes available.