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With what looks like the Bad News Out on the table re. Projects, approval by regulators ( Chi & Aus) should give the SP a good lift 'as long as Brent stays above 48'. Even if SP gets stuck at these levels 'longer term' the divi is still looking good esp. If it's in an ISA.
Once Brent gets above 50 again - price looks good for 19.....mind any drop below 18 is time to add. Permit to drill off NF now in the bag also helps.
With real growth (estimated) to be around 4-41/2 % for China, rather than the official figure of 6.9% and India starting to look up again, a positive impact on crude prices should start to be felt 'sooner rather than later' .....add in the need for several producing countries to get there budgets on track will add to an upward pressure on prices. Last but not least OPEX is being reduced significantly due to the continuing drop in Contractor......all making the divi secure and a good bet the price will rise.....
Not confirmed yet but overheard in pub today..... Shelll in US and Rest of Word, are reducing pollutants in exhaust fumes by adding an approved compound to their diesel and petrol....its reported that an ( American reporter) was heard to say if Shell are reducing pollutants in the exhaust fumest, they will be in big trouble with the EPA just like VW ! On a more serious note many Pundits/ Brokers in US expecting Brent to avarage 60-75 by end Nov- Dec. Gas prices also expected to rise.......
WTI above 50 should give Brent a lift......... add NATO's recent views on Russia and in short term 19 in sight.
China stabilising, colder weather kicking in, shortens bailing out........as Warren said......if the businesses fundamentals and management are good........then a contrarian stance can be quite profitable.......yes there might be a drop but on the other hand the rise in price can tick away until the deal with BG is sealed, then the bounce will be anything but a dead moggy.......simply a matter of time.
With Cushing stock confirmed down and more rigs coming off hire in US / other countries....balance in prod v use could be sooner than estimated......whilst 1900 would be a good target for some to balance their holdings, it should run further on pos Aus and China news re. BG takeover......if Brent can steady in region of 55-60 then there's a good chance it will see 20 by March. Longer term 'after integration of BG' should see it reach the 28 mark. One thing is for certain the current Shell Management are better than they were in the late 90's.
Looking good for 1800 Wednesday......even with any increase in Cushing stock.
Looking ahead approval for the BG merger by Chi & Aus should see RDSB at 1900......add in any agreement by Saudi and Russ on prod quotas will see it at 2000+.
At current prices and divi GSK looking to be a bargain......might be a year or two to get back to the 14 + Mark but based on what's in the pipeline! expanding populations! increased spending on drugs in 3rd world....it has to be a good bet.
Cost Cuts with the takeover of BG could be 5-10% higher than current estimates, in part due to significant reduction in future contractor rates and improved buying power / integration of logistics ops......refinery margins will also see benefits of reduced Opex. Any drop below 1650 will be the op to add.....divi now looking safe for the next 3-4 qtrs. Rise well supported by drop in USD.
Temp out of Alaska drilling should give them a good tax offset.......also make it easier for the next permit rounds and rig rates will be lower.
Bag it while you can......anything below 1575 is a bargain........it will poss go lower but you can bet on it that it will rise again once our Arab cousins sort themselves out......also TLW looking good at 150.
When crude bounces back there will be the additional benefit to producers of low service / contractor rates on MMSC type contracts and on new Projects......in meantime any agreement by Saudis to cut prod, a cold winter in US/ Europe and/ or China keeping their markets steady should see anything upto a 50% + lift in Brent price by New Year.....add in early approval for the BG takeover and a lift in share price to 19-20 by mid 16 prob an evens bet.