Shell Share Price Could Get a Boost from LNG Demand – Jefferies

The Royal Dutch Shell share price declined on Tuesday even as crude oil prices surged to the highest level in more than 6 years. The stock crashed by almost 2% and ended the day at 1,420. This price was about 7% below the highest point this year.

Shell news. The Shell stock price has struggled this year. It has risen by less than 20% even as oil prices have almost doubled and the biggest energy ETF has jumped by more than 50%. This week, the price of Brent and West Texas Intermediate rose to a six-year high as investors reflected on the latest disagreements between Saudi Arabia and the United Arab Emirates (UAE).

Shell bulls believe that the stock could could continue rising as demand for oil increases. They believev that this trend will lead to more profits and free cash flows, which will lead to higher dividends and buybacks. However, they are concerned about the recent court ruling that mandated the company to transition to low carbon by 2030. 

Meanwhile, analysts at Jefferies are bullish on the Shell share price. In a note, they noted that the global demand for Liquified Natural Gas (LNG) will exceed supply until 2025. They said that the firm was best positioned to take advantage of this. This is because it has the largest production capacity portfolio that will increase by at least 7M tons per year. They noted:

“We see gas as a key transition fuel for developing economies with India and China being the biggest growth drivers, more than offsetting demand decline in Europe, Japan and North America.”

Shell share price analysis

The daily chart shows that the RDSB share price has been in a tight range in the past few weeks. The stock has moved slightly above the 15-day and 30-day Volume Weighted Moving Average (VWMA). It is also between the support and resistance levels at 1,285p and 1,518p. 

It has also moved slightly below the upper side of the ascending channel pattern. Therefore, the stock will likely maintain the bullish trend as bulls target the next key resistance at 1,518p. However, a drop below the support at 1,285p will invalidate this thesis.

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RDSB shares chart

Shell share price

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