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.
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