Shell share price rises as company continues talks with union workers
Royal Dutch Shell Plc (LON:RDSA) and the United Steelworkers (USW) union held talks for a second day, with negotiations reportedly “moving along”. News over the ongoing talks comes as a report from Moody’s rating company, reported by Reuters, claims that the FTSE 100-listed oil major, along with its peer Exxon Mobil Corp, may be better situated to withstand the recent drop in oil prices.
Officials from both sides held a meeting yesterday in Houston that ran into the night. The USW wrote in a message to members that while progress was being made during talks it also threatened further walkouts. The union said in a text message that bargaining “is moving along. Industry needs to close the gaps and end the strike or see it expand.”
According to an update on the Anglo-Dutch group’s website: “Shell and USW continued negotiations on Tuesday, March 10. Shell remains committed to negotiating a mutually satisfactory agreement.” Negotiations broke off on 20 February after union workers turned down an offer from Shell, which is acting as lead negotiator with the 30,000-strong United Steelworkers on behalf of oil producers including Exxon Mobil Corp. and Chevron Corp.
A report from Moody’s, quoted by Reuters, suggested Shell and Exxon, the world’s two largest oil companies, may be in a better position to handle the collapse in oil prices than their rivals as they are closer to completing expensive investments, while others need to continue spending. Crude prices have nearly halved since June, which is likely to send the books of most oil companies into the red, sparking a rush to cut costs across the sector.
However, some companies may find those cuts easier than others depending on how they are moving in their spending cycles. The rating company claims that both Shell and Exxon “had already entered a lower spending phase, with major projects reaching completion and coming on stream over the next two years”.
As of 10:26 GMT today, Shell shares were trading 0.18 percent up on the day at 1940.00p, in line with the benchmark FTSE 100 index. The company’s stock has lost over five percent in the past five sessions. According to CNN Money, the consensus forecast amongst 38 polled investment analysts covering Royal Dutch Shell has it that investors should hold their shares in the company. Last week, the consensus forecast was downgraded from “Buy”.
As of 11:23 GMT, Wednesday, 11 March, Royal Dutch Shell Plc ‘A’ share price is 1,937.00p.