SHELL PLC: The oil market does not come to rest!

After a short but sharp setback, the share of the energy company SHELL PLC is picking up speed again. Can the price target of GBP 29.50 be reached soon? The reason for the strong demand in the share and for the rising oil price is currently to be found in the armed conflicts in the Middle East. Some of the most important oil suppliers are located in this area; the enormously important oil supply to the West is threatened with interruption! In addition, the important oil producer Russia is at war with Ukraine. Both conflicts seem to have in common that a quick and peaceful solution is not imminent. This uncertainty clearly points to a continuing high oil price! The fact that in the oil market not so fast with peace and sinking prices to be counted may be seen also with the mega takeover of Pioneer Natural Resources by ExxonMobil. The U.S. oil giant buys for no less than USD 59.5 billion its competitor, the third largest shale oil producer in the lucrative American Permian Basin. The takeover is likely to be driven by two main factors: First, U.S. crude oil inventories are at their lowest level since 1985, and OPEC has announced further production cuts. It expects supply shortages through the end of 2023 and beyond. For another, U.S. and European oil stocks are currently trading near their 30-year lows relative to calculated price-to-earnings ratios. Nevertheless, many investors are still underinvested in the sector. Notably, SHELL PLC has many favorable attributes while reliably paying a high quarterly dividend.

SHELL PLC stock remains appealing, with its attractive dividend policy. Since energy prices are unlikely to settle down anytime soon with the trouble spots and warring parties, the stock may soon reach our price target of GBP 29.50; we would then realize the potentially very quick profit!