CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Royal Dutch Shell shares continue rally amid renewed confidence

The Anglo-Dutch oil titan Royal Dutch Shell has seen its share price rise once again, following a year where the company has performed poorly compared to peers. Is the current Shell shares rally a sign of good things to come?

  • The Royal Dutch Shell share price rose to £14.17 when markets opened on 11 June
  • The share price has risen 3.36% in the past month
  • Shell recently rose dividends to 12.26p per share
  • Investors remain confident despite negative legal rulings
  • Ready to trade the Royal Dutch Shell share price? Open an account today

Why are Shell shares rising this week?

The Anglo-Dutch oil giant Royal Dutch Shell saw its shares continue their week-long rally when London markets opened on 11 June. Shares immediately rose to £14.17, continuing a rally that has accompanied mounting concerns for the long-term viability of Shell. This was following a ruling from the Royal Dutch Court in The Hague that Shell must slash its carbon emissions by 45% by 2030.

Although Shell reacted with dismay and surprise at the ruling, which could threaten the company's oil profits and put it at a competitive disadvantage, investors remain optimistic. On 10 June, JP Morgan gave Shell its seal of approval, claiming Shell shares to be the 'best value' option among the oil majors, following a meeting with Shell CFO Jessica Uhl.

In addition, Shell recently revised its dividends for shareholders upwards to 12.26p per share, with the expectation that this will continue to rise for the next three quarters.

Uncertain times ahead for Royal Dutch Shell

So, why has the Shell share price continued to rise? After a positive start to the year, with the company share price up by 14%, Shell is riding on a wave of success for the global oil industry. This is thanks to soaring demand being driven by economies that are roaring back to life as the pandemic recedes. Oil prices recently hit two-year highs, which has helped push up the profits and share value of all oil supermajors.

However, it is worth noting that competitors, such as ExxonMobil and Chevron, have seen their share prices rise by 30% and 50% this year respectively, while the Shell share price has risen only 6% in the same period. Although Shell has underperformed in the oil market, a change could be on the horizon.

Recent commitments by the oil company to drive debts down to a more sustainable level have helped to boost the share price, as have pledges that the company will accelerate its post-carbon transition. Whether this will translate into lasting gains for the Royal Dutch Shell share price remains to be seen.

Is the Shell share price on the rise for the long term? Trade Shell shares today

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This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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