$SHELL PLC SPON ADS EACH REPR 2 ORD SHS(SHEL)$ had a rough week since 2 major events took place. OPEC+ decided to cut 2 million barrels production. To put it into context, 2 mil is not necessarily the actual production as most of its members are below production target. Hence, it is fair to say the real impact is ~1mil cut, which is equivalent to 1+% of world supply. $Light Crude Oil - main 2210(CLmain)$ responded favourably last 2 weeks. SHELL ADR closed post market at 54 after the production cut. However, the Oil and Gas giant disclosed Q3 '22 advance notice the next day, highlighting impact of price volatility and margin shrink. 5% drop were observed throughout the trading day.
US release of oil SPR is expected to stop in Oct, and the White House is willing to give way to Venezuela oil allowing $Chevron(CVX)$ continuing operations.
I am long SHEL by selling Put at 52.50. In my view, the upside is 58, and floor is set at 48 in the next 3 months. Let us see how the Russian oil price cap change the dynamics.
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