In mid-May 2020, the price of oil rose again to 30 US dollars per barrel for the first time since the crisis month of March. The price increase had a positive effect on the securities of the major oil companies.
This is shown by the rise in the price of the Shell share.
On 18 March 2020, its value was a meagre 10.10 euros. At the beginning of April, the price climbed to over 18 euros and in May settled at an average of 14 euros. Two reasons lead to this development: the optimism of shareholders and the short supply.
Risky asset classes, which include commodities, are benefiting from the good mood on the stock markets. On 18 May 2020, a barrel of Brend, the North Sea variety, cost over 34 US dollars. This meant an increase of over one US dollar compared to Friday.
Likewise, the oil price for the American oil grade WTI rose. A barrel - 159 litres - reached a value of 31.43 US dollars. The rise in prices was partly the result of supply reductions. These occurred voluntarily or involuntarily. A voluntary reduction consists of the production cut by the oil cartel Opec. Together with the allied states, the grouping, known as Opec , announced the validity of the cuts for the beginning of May.
Winners and losers of the oil price crash
When the world economy is booming, oil consumption is high. If it weakens, the demand for the fuel is reduced. Already in 2009, there was a sharp drop in demand on the oil market. At that time, the financial crisis plunged the stock market into chaos.
This scenario has been repeated since the beginning of 2020. Under normal circumstances, the oil industry is characterised by steady growth. The combination of the oil price crash and the Corona crisis threatens a drop in production of around 90,000 barrels a day. With consumption at 90 million barrels a day, this does not seem much.
For the growth-intensive oil sector, the value represents an extraordinary phenomenon. In the volatile market in Exness Accounts, the balance changes as a result. The result is strong gains and losses in various states, regions and sectors.
Shell focuses on charging stations for electric mobility
Although Royal Dutch Shell is suffering from the falling oil price, there is a chance of a rising share price in the future. In addition to oil and fuel production, the company has been focusing more on fast charging points for electric cars since 2019. In Germany, the group is planning 50 HPC columns in 2020, each with a capacity of 150 kilowatts, in cooperation with the energy provider EnBW. In February 2020, the company announced a second production wave of charging columns. In all likelihood, these will be located primarily in the north of the Federal Republic. Electromobility and related technologies are among the most forward-looking sectors on the stock market. Accordingly, an investment in Shell shares is not only worthwhile for investors with an affinity for risk.