Bags of potential in Shell RDSB?

[Bouleversee]

They may be OK in the long term if they get their environmentally friendly policy sorted but if you will be dead by then I suggest you concentrate on the short term. I hold but am not sufficiently confident to buy more, long term not being appropriate in my case either.

[johnhemming]

What affects RDSB is the oil price.
What affects that is the willingness of investors (particularly in the US) to invest in further oil production. My impression, which may be wrong, is that investment is being held back in the US which will result in prices picking up.

[monabri]

Not as cheap as January 2016 when they were sub £13 per share.

[johnhemming]

WTI bottomed at about USD 35 in January 2016. RDSB may have a forecast PE of 13 at the current oil price (and assumptions as to the future), but in the end particularly for the majors it is about the various oil prices. I don't know what price is break even for them.
With the buy back back programme:
https://www.investegate.co.uk/royal-dut ... 0200H0864/
Holders also have concentration of their holdings rather than dilution.

Whether ReallyVeryFoolish is right about hitting USD100 in the next price increases or not is difficult to say, but this is commodity prone to price spikes.

The supply demand balance in the oil market report
https://www.iea.org/oilmarketreport/

Is a good indicator of future prices. We are now back into a draw down, but they predict supply greater than demand. Whether that will be true or not is unclear. One assumes that ReallyVeryFoolish's indicators have an influence say about 3-5 years down the line.

[johnhemming]

The forecast pe is higher, but that makes all sorts of assumptions. Otherwise I tend to agree with your conclusions and am interested in your comments.

The point about oil to chemicals is an interesting one. It is, however,not clear whether that would increase the usage of crude or reduce it.

[johnhemming]

I think this is very big news indeed.

It is obviously big news for the owners of the crackers and the people that work in them. However, given that fossil fuels are often the feedstock for many chemical productions I am not clear on how this would broadly impact the use of crude oil. I would think if it is more efficient that it would use less crude oil for the same outputs.

[monabri]

Is the view similar for BP? ( I hold both roughly in the ratio 3:1 RDSB:BP)?

[AndyPandy]

Would the partial flotation of Saudi Aramco have a short-term effect?

"Business sources say the Saudis are expected to make shares available for 1% or 2% of the firm, and the offer will be for existing company shares.

Saudi Aramco is thought to be worth about $1.2tn (£927bn)." (BBC https://www.bbc.co.uk/news/business-50070823)

That means £100-200Bn of inflow which has to come from somewhere. Fund cash balances, yes, but it could also mean selling down other oil producers to raise funds and/or to maintain portfolio balances.