AUS
NZ
UK
CA
USA
IND
There was a massive decline in the price of the crude oil as well as in the price of the various futures contracts of oil on 20th April 2020. The historic fall in price was primarily driven by a war of supply between OPEC+ countries and Russia, as both are looking to dominate the global supply of the oil. Previously, during an OPEC and Russia meeting, it was reported that a deal might have been agreed between the two parties on the supply contracts, but it was later revealed that no deal was agreed and both started pumping excess oil into the market, which led to an oil surplus leading to a fall in prices. This was further worsened with the ascent of the coronavirus pandemic, as the demand for oil all across the world dropped hugely, with all industrial activity being stopped completely. This led to a further decline in oil prices. The situation became so bad that the West Texas Intermediate (WTI) Crude Oil Futures for May series dropped below zero and reached US $-37.80 per barrel in trading on 20th April 2020. This drop was primarily led by Futures contract holders not being able to take additional deliveries of excess oil supply, with no storage availability, and they were ready to pay money for their inventory to be sold.
After showing some signs of a recovery from the above-mentioned fall, the US Crude oil Futures have again fallen. The WTI Spot Price, at the time of writing on 29th April 2020, at 08:30 A.M GMT was reported to be at US $13.96 per barrel. Brent Crude prices have also been declining for the past one month or so, due to the same reasons as discussed above.
WTI Crude Oil Spot Price Chart
Daily Chart as on 29 – April – 2020 (Source: Thomson Reuters)
This week, the biggest oil-backed exchange traded fund begun to unload all its short-term contracts out of fear of oil plunging into negative territory again. Hence, the prices dropped sharply again on 27th April when US Oil Fund, the largest oil ETF, said it would sell all its oil delivery futures contracts in June — 20 per cent of its $3.6 billion portfolio — over a four-day period. After the fund's regulatory filing, WTI settled around 25 per cent lower at $12.78 a barrel. The latest fall illustrates how speculative trading can interfere with an increasingly unstable oil market when demand for the abundant commodity is so subdued. Oil futures do not trade like equities, as contracts expire every month when purchasers take the crude physical delivery. The fall to negative prices came the day ahead of the May WTI contract expiry, with the most actively traded June contract now in trade.
Amidst these oil price woes, global oil giant, Royal Dutch Shell Plc, or more popularly known as, Shell, announced on 21st April 2020 that it would be postponing its development in the North Sea, called the Jackdaw Natural Gas Field Project, which has been previously valued at around US $ 1 billion.
To see how the oil price crisis has affected the company and how the shareholders have taken to these decisions, let us have a brief look at the company’s share prices performance on the London Stock Exchange.
RDSA Share Price Performance
(Source: Thomson Reuters) Daily Chart as on 29 – April - 2020, before the closing of the London Stock Exchange Market
At the time of writing this report, as on 29th April 2020, 08:30 A.M GMT, the Royal Dutch Shell Plc stock was trading at a price of GBX 1475.00 per share on the London Stock Exchange market, an increase in the value of 2.95 per cent or GBX 42.20 per share, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 1432.80 per share. Royal Dutch Shell Plc's market capitalisation was estimated to be GBP 110.8 billion, with regards to the current market price of the company's stock.
Royal Dutch Shell Plc's share has been reported to have lost around 39.30 per cent in value in the last twelve months since April 29, 2019, when the company’s stock was trading at a price of GBX 2430.00 per share at the time of the closing of the London Stock Exchange market. In the last six months since October 29, 2019, when the company's stock was trading at a price of GBX 2329.50 per share, the price has also been stated to have lost around 36.68 per cent in value. Royal Dutch Shell Plc's share reportedly increased from the share price of GBX 1325.20 per share set by the organisation on March 30, 2020 by about 11.30 per cent over the last one month.
At the time of writing, the beta of the firm's stock was recorded at a value of 1.09 pointing towards the fact that the company’s price movement is slightly more volatile relative to the change in the value of the comparative benchmark index.
While Royal Dutch Shell Plc announced the postponement of its projects, other UK based Oil companies have also taken a significant hit, as the industry is currently non-operational, and prices of oil are at rock bottom levels, which is a reason why a large number of oil companies could see revenue declines and profits failing of as well. The following is an overview of how these UK based oil companies have been performing on the London Stock Exchange Market.
ENOG Share Price Performance
At the time of writing this report, as on 29th April 2020, 08:35 A.M GMT, the Energean Oil and Gas Plc stock was trading at a price of GBX 651.00 per share on the London Stock Exchange market, an increase in the value of 2.36 per cent or GBX 15.00 per share, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 636.00 per share. Energean Oil and Gas Plc's market capitalisation was estimated to be GBP 1.126 billion, with regards to the current market price of the company's stock.
At the time of writing, the beta of the firm's stock was recorded at a value of 2.09 pointing towards the fact that the company’s price movement is more volatile relative to the change in the value of the comparative benchmark index.
The company’s stock has yielded a positive one month return of approximately 7.10 per cent, while a negative three months return of 22.7 per cent as well as a negative six months return of approximately 31.60 per cent by the time of writing.
DGOC Share Price Performance
At the time of writing this report, as on 29th April 2020, 08:40 A.M GMT, the Diversified Gas & Oil Plc stock was trading at a price of GBX 93.00 per share on the London Stock Exchange market, a decline in the value of 0.64 per cent or GBX 0.60 per share, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 93.60 per share. Diversified Gas & Oil Plc's market capitalisation was estimated to be GBP 601.67 million, with regards to the current market price of the company's stock.
At the time of writing, the beta of the firm's stock was recorded at a value of 0.73 pointing towards the fact that the company’s price movement is less volatile relative to the change in the value of the comparative benchmark index.
The company’s stock has yielded a positive one month return of approximately 13.0 per cent, a positive three months return of 4.60 per cent, but a negative six months return of approximately 9.40 per cent by the time of writing.
CNE Share Price Performance
At the time of writing this report, as on 29th April 2020, 08:45 A.M GMT, the Cairn Energy Plc stock was trading at a price of GBX 112.50 per share on the London Stock Exchange market, an increase in the value of 1.63 per cent or GBX 1.80 per share, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 110.60 per share. Cairn Energy Plc's market capitalisation was estimated to be GBP 652.05 million, with regards to the current market price of the company's stock.
At the time of writing, the beta of the firm's stock was recorded at a value of 2.07 pointing towards the fact that the company’s price movement is more volatile relative to the change in the value of the comparative benchmark index.
The company’s stock has yielded a positive one month return of approximately 36.50 per cent, a negative three months return of 35.80 per cent as well as a negative six months return of approximately 37.70 per cent by the time of writing.
Comparative Share Price Chart of ENOG, DGOC and CNE
(Source: Thomson Reuters) Daily Chart as on 29 – April - 2020, before the closing of the London Stock Exchange Market
