Royal Dutch Shell (RDSB & RDSA) 🐚 🏗 - Share Chat

I think the fear of more lockdowns and reduced economic activity, along with high oil inventories is hitting them hard

I think they will come back in the long term though. Despite all the focus on renewables, before the pandemic came along oil use was still rising.

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That’s pretty much my thoughts

Just sold my shares for a small loss.

I do believe that Shell will still be around in 10-20 years, but I don’t think they will return to pre-covid levels anytime soon or for a sustained period.

The pivot towards renewable energy will be difficult and a lot less profitable.

There are good reasons to remain an investor, but it’s not for me anymore. Good luck all!

Struggling with this one - double down and buy more and take the short term pain or cut my losses and invest elsewhere. My original thesis was that oil demand would return mid (Jul-Aug) 2021 but im less sure of this now given everything that is going on.

There is a third choice: Do nothing for now.

That’s what I’m doing. Don’t want to increase my exposure. but I do think it will come back long term

I’m torn between holding out long term for a rebound or just cutting my losses and investing in something that has growth potential. Shell and BP seem to just be down almost daily and even when they’re up they lose all their gains the next day.

that is my default position :grinning:

I’m actually quite bullish on the European oil majors, short term it is going to be very rough but I think when we’ve lot a vaccine or effective treatment for coronavirus I think oil will rebound reasonably strongly especially with the current lower levels of investment in exploration and production. Also I think air travel will rebound strongly when we do have an effective treatment/ vaccine, only problem is it’s very uncertain when that’ll be. I think the long term strategy will work out too, they might end up overpaying for acquisitions and maybe make a few poor investments but I’m hoping that’ll be covered by the discount on the share price. And in the meantime the dividend helps me stay patient, hopefully it’s not a massive mistake :sweat_smile:

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I supposed id ask, why did you buy Shell in the first place?

I bought when they were fairly low in proportion to their past share price, expecting an eventual recovery down the line. But since then it’s continued to drop to below its previous low point. I still expect it to recover down the line I just don’t know the time frame on it, I didn’t put a lot into it anyways so it’s not a huge loss just around £25.

Their Q2 report suggests they were expecting the lower oil price to have a larger impact in Q3, we also had an increase in COVID cases in many places around the world keeping aviation down in Q3 on top of that. That’s possibly in part at least resulting in the continued suppression of the share price.

The lack of major acquisitions doesn’t help either.

I don’t see that changing on Q4 either. There’s one acquisition expected by the end of the year (possibly the start of next year the way things are going), but no other major deals that I’ve seen (I’ve not read everything though ). So there’s not necessarily much going on to excite.

Shell made some big deals over the last few years, but they’ve also been hit and miss it seems in the past. 2020 looks like a bit of a write off but everything’s a bit suppressed with Covid.

The share price probably isn’t going to get much better until at least mid 2021 when vaccines are fully rolling out and shell complete more of their acquisitions.

Yea that’s what I’ve been hearing in general the recovery is expected mid-late 2021 for Oil companies. I will likely just hold out as my investment isn’t very large, I don’t expect it to return to pre-covid levels though with the renewables on the rise very quickly.

I think its going to depend on the general state of covid and aviation, for the oil side of things at least, and their ability to effectively conduct business in all their other areas of business.

A vaccine is looking very favourable for the end of the year, not mass roll out yet. Though AstraZeneca have the manufacturing capacity set to produce 3 billion dozes of the oxford vaccine per year. It’s very likely they’ll be producing the vaccine before final approval ready to send out initial batches to Europe etc.

Assuming no hurdles in the vaccine im optimistic a fair portion of vulnerable people will have an initial vaccination starting early 2021 which will reduce the need for heavy restrictions. Well also be coming out of winter reducing the need for restrictions as well.

This should very likely have some decent impact, but there’s still the phycological issues of getting people out and about again.

It will at least i think reduce any concern on oil specifically.

Oh, also 29 October Shell release Q3 quarterly results, so this is perhaps worth reading.

I’m surprised people are bugging out of Shell at this point given that we’re nowhere near reaching the end of the coronavirus problems.

Large amounts of travel are predicated on us being allowed to travel and safely, so until well into 2021 I would expect there to be continuing reductions in oil use. Once we start being able to travel properly then I would expect a serious recovery in oil sales - some jobs will have switched to working from home but a large number won’t.

Renewables are a longer term play for Shell and a potential threat as well as opportunity but oil will be needed for a considerable time yet.

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I honestly wouldn’t be surprised if the vaccine takes even longer than that and production and distribution would likely take a while too. You’re right the recovery is likely largely dependent on the aviation industry which is the most restricted industry due to COVID. Yea I saw the earnings report alert on Yahoo Finance not sure what to expect with it tbh will wait and see. Fuel prices have seemed to returned to being around what they were pre-COVID, I remember at their lows it was under £1 per litre. But with all the work from home everyone has been saving on fuel and not needing to fill up as much so doubt it will be a great earnings report.

Further to my points earlier, I could see COVID-19 having the same impact on oil companies that the 2007/08 financial crash had on banks.

A lot of investors who held these stocks religiously have sold and Shell/BP/Exxon just don’t look as attractive as they did 10/20 years ago.

I exited my position in RDSB and BP last week.
Long term I think there will be a substantial recovery for both these giants, as oil is not going anywhere soon. Both have indicated they are willing to pivot towards renewables though I suspect this is mostly lip service at present.

If I am a believer, why did I sell…

The second wave of Covid has well and truly gripped the world. The recovery is somewhere in the distance. Vaccine production and distribution at a level that will affect transmission rates will take ages to roll out. I’m expecting recovery to start mid 2021, but not get going till 2022. There are so many better places for my money in the next 6-9 months. RDSB will be in the doldrums for at least that time. I will buy back in some time next year

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Don’t forget that price recovery in stocks starts before the real recovery in the economy. The same as share drops happen before the actual economic drop.

I still hold a position in BP and I am down quite a lot. I think there will be some hardship in the next couple of months, but I would rather buy than sell at those prices. I don’t think we could keep having the same measures of lockdowns, quarantines and all that after this winter. If we do, oil prices would be the least of our concern.

Hi friends

We wrote about the outlook for Shell on the Invest Hub yesterday…

…and got some quotes in the Evening Standard.

Enjoy!

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Well done David. Free advertising for freetrade. Its a great way of getting the company and investing in same sentence