Shell share price forecast as crude oil and natural gas prices soar

By:
on Oct 5, 2021
  • The Royal Dutch Shell share price skyrocketed to the highest level since February.
  • The stock soared as the price of crude oil and natural gas soared.
  • We explain why the stock will soon hit 2,000p in London.

The Royal Dutch Shell (LON: RDSB) share price skyrocketed to the highest level since February 2020 as oil and natural gas prices soared. The stock surged to 1,707p, which was about 110% above the lowest level since October last year.

Crude oil and natural gas prices surge

Royal Dutch Shell is one of the biggest upstream, midstream, and downstream oil and energy companies in the world. The firm explores, stores, trades, and sells oil and gas globally. 

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Therefore, like other integrated oil companies, Shell has benefited from the surging oil prices. The price of Brent surged to more than $83 while the West Texas Intermediate (WTI) soared to more than $80. This is notable since oil prices crashed to the negative zone at the height of the Covid panic in 2020.

The rally was supercharged by an OPEC+ meeting that happened this week. The cartel decided to leave their supply goal intact, meaning that they will continue adding 400k barrels per day every month. This monthly increase was significantly smaller than what analysts were expecting. As such, some analysts believe that oil prices will soar to $100 per barrel soon.

At the same time, the price of natural gas has rocketed to a multi-year high. With countries facing significant energy shortages, there is a likelihood that the prices will keep rising as winter approaches. The natural gas prices are notable since Royal Dutch Shell is one of the biggest dealers around the world.

To some extent, the pandemic helped Royal Dutch Shell and other supermajors like BP and Exxon. It pushed some of these companies to sell non-core assets and cut their costs. As a result, what remained are relatively smaller companies that are more efficient. 

Therefore, the Shell share price will likely keep doing well as cash flow rises and the company increases its shareholder returns.

Shell share price forecast

The weekly chart shows that the RDSB share price has been in a bullish momentum in the past few weeks. Indeed, it has risen in the past four straight weeks. At the same time, it has moved above the key resistance level at 1,487p, which was the previous year-to-date high. 

The price has moved above the 25-day and 50-day moving averages and the 50% Fibonacci retracement level. 

Therefore, there is a likelihood that the bullish momentum will continue as bulls target the next key resistance at 2,000p.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro.

10/10
68% of retail CFD accounts lose money