Shell (RDSB) Share Price Forecast: What Next After Recent Weakness?

The Royal Dutch Shell share price is under intense pressure as the price of crude oil starts to drop. The RDSB stock has dropped to 1,368p, which is 10% below the year-to-date high of 1,520p. The RDSA, on the other hand, has dropped by 10% to 1,435 while BP shares have fallen by 9% in the past few days.

What happened: Shell and other commodity stocks have done well from March last year helped by the rebound of commodities. Brent crude oil, for one, has risen from below $15 to $70 while the West Texas Intermediate (WTI) has moved from minus $38 to more than $60. 

Further, the rising demand and the return to dividends have pushed more investors back to oil and gas companies like Shell, BP, Exxon, and Chevron. 

However, recently, the price of crude oil has retreated, with Brent and WTI falling by 15% in the past few days. This performance is mostly because of the overall strong US dollar and fears of low demand. This has in turn pushed investors away from oil stocks. Indeed, the Vanguard Global Energy ETF (VDO) has dropped by more than 12% in the past few days.

Notably, Royal Dutch Shell made headlines recently when it revealed for the first time revenues of its oil trading business. The firm said that the secretive venture where it stores and sells oil doubled to $2.6 billion. This revenue was substantially higher than that of Vitol, the biggest oil trading company, which made $2.3 billion in 2019.

Shell share price forecast

The four-hour chart shows that the RDSB share price has been in a downward trend recently. Last week, it moved below the important support level at 1,456p, where it had formed a double-top pattern in January and where it struggled to move above on February 21. Also, the stock struggled to move above the important resistance level at 1,520p. 

It has also moved below the ascending trendline that is shown in black. Therefore, in the near term, the stock could keep falling as bears target the next key support at 1,310p, which was the lowest level on February 19. However, an increase above 1,453p will invalidate this trend.

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RDSB shares chart

Shell share price

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