- Summary:
- Royal Dutch Shell Share Price could gain by another 22% as investors react to higher prices and the deal between the company and Kazakhstan
Royal Dutch Shell share price is rising today as the price of crude oil continues to hover near its highest point in 9 months. The company’s class A shares are up by 2% and are trading at 1,386 while class B are up by 1.85%. Similarly, BP share price is also up by more than 1%.
What is happening? Shell share price is possibly reacting to the higher crude oil prices. Already, the price of Brent has moved above the psychological level of $50 while the West Texas Intermediate is closing-in on $50. Like I wrote earlier, there is a possibility that the two prices will rise to $60 in the near term.
Higher oil prices are good for oil companies because it increases their revenue and cash flows. For investors, this means higher dividends and possible buybacks. It also means that these firms will afford investing in other strategic sectors like clean energy.
What else? Shell share price is also rising possibly because the company managed to settle a dispute in Kazakhstan over revenue sharing. The company, together with Eni, paid just $1.3 billion to settle the dispute that has been going on for years. They also agreed to give the country as much as $600 million through 2037.
Shell share price technical analysis
So is Shell share price still a buy? On the weekly chart below, we see that Royal Dutch Shell class B share price has been consolidation mode slightly below last week’s high of 1,400. It is also in the second straight months of losses, which is notable since the shares have risen in the past 8 consecutive months. It is also along the 50-week moving average and along the 23.6% Fibonacci retracement.
Therefore, I expect the shares to consolidate at this level before soaring to the 38.2% retracement at 1,622p, which is 23% above the current level.
Shell technical chart
