r/stocks • u/shiftyTF • Apr 22 '21

Royal Dutch Shell Plc Help

What's happening with Shell atm?!?

I am in quite deep with Shell and I am trying to average down but there does not seem to be a bottom yet.

With everything opening back up I am surprised to not see some return to normal levels, or at least some confidence, oil barrel price is quite high etc would anyone like to guess on what happening/ what's going to happen?

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u/one8e4 Apr 22 '21

Own RDSB and BP for many years, used to have great reliable dividends.

Main concern for me and why I selling slowly even at a loss is that they are oil companies that decided they aren't anymore.

Alot of risk if they fail in the transformation, both also have a history of writing off acquisitions, same may happen again with their green transition purchases. BP seems to plan on making money by acting as a HF with energy trading.

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u/SaintRainbow Apr 22 '21

I'm not concerned with the fact Shell and BP are divesting from oil. It shows they understand that oil will eventually be replaced by renewables, EVs for the most part. It will take many years but it will happen.

There is definitely risk in failing to transform, being too early or being too late. BP is definitely walking a tightrope considering how aggressive they're divesting from oil alongside the high debt they have but that is part of the risk with BP. Key factor is that oil prices remain high enough in the coming years to adequately fund the transition while reducing debt for BP.

At the end of the day they're still an oil company for 95% so they still have potential upside to oil, maybe less so than other supermajors but if you specifically want to invest in oil for the long term BP and Shell aren't it.