Shell Share Price Slumps On Falling Oil Prices, Risk Aversion

Summary:

The Shell share price is down for a second day as the impact of risk aversion and a surging dollar exerts bearish pressure.

The Shell share price is down for the second day on the back of continued risk aversion, falling oil prices and a stronger US dollar which is caging commodity prices. The two-day decline in the Shell share price follows similar declines in crude oil prices.

Brent crude is down 1.36% this Monday, following Friday’s 3.93% drop that followed a broad-based selloff in commodity prices. Brent crude price has fallen to 9-month lows, with a stronger dollar triggering a broad-based commodity selloff that is impacting oil stocks negatively.

Australia’s ANZ Bank has opined that expensive commodities due to a surging dollar reflect the market pricing in a typical recessionary impact. This crude oil selloff may also push the Organization of Petroleum Exporting Countries (OPEC) and its allies to adjust the production quota of its members to shore up prices.

The Shell share price is also responding negatively to the end of the partnership between SHell and Irish renewable energy company Simply Blue Group, choosing to focus on its Emerald and Western Star offshore wind projects in Ireland. The Shell share price is down 1.08% as of writing.

The intraday violation of the 2218 support will complete the time filter confirmation for the breakdown of this pivot. This scenario will see 2125.5 (28 April and 29 July lows) become the next downside target.

There are additional harvest points at 2076.0 (25 April 2022 low) and 2020.0 (29 March 2022 and 22 July 2022 lows). The 15 February/15 July lows at 1948.5 and 1882.0 (27 January 2022 low) are additional harvest points for the bears, which are presently unviable and require further price deterioration to become valid.

On the flip side, the bulls need to force sequential breaks of the 2260.5 and 2311.5 resistance levels and the 2382.0 barrier to restore bullish bias to the stock. This will give the bulls clear skies to target the 2506.5 resistance, with the 9 July high being the price top that needs to be transcended for this 11 February 2019 high to become viable. An additional target to the north comes in at 2625.0 (21 September 2018 and 12 July 2019 highs).