Has anyone bought the dip ?
I have a large % of my portfolio in CTY City of London Investment Trust which has a large holding in RDSA and RDSB.
Its a tough stock to own for me. Whilst I’m sure the whole ‘ethical investing’ & ESG argument is completely overblown I do think there is some merit in this.
But fundamentally the oil market is going literally swimming in supply & I think that oil prices are going to be under pressure for quite a while longer. Whilst cheap shale oil fields keep coming online its not going to be reserved anytime soon. On top of this I think the debt levels at a lot of oil companies are going to cause issues for them, I think all of the major oil players should be fine but I expect some of the smaller ones to fall (especially those with high costs per barrel).
In my eyes, buying this through a trust or index is the way to go. I can see any argument for Shell being undervalued but I’m not sure what reverses that trend over the next 5 years. Looking past 5 years you’d have to ask what % oil is going to provide in the energy mix on a global level. I do like their energy/electric credentials though, I think Shell has been fastest to pivot here
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price point has actually been upgraded to ‘buy’ by lots of the banks I noticed.