Shell PLC (SHEL) Stock Forecasts

Summary

The current price of a barrel of the crude oil benchmark grade, West Texas Intermediate, has fallen below the $80 level, as we had expected. That’s down from a high near $90 in April but still up 8% from the start of the year. We look for prices to stabilize at these levels for the next few quarters — despite the onset of the summer driving season — while global economic growth remains under pressure due to high interest rates. We now look for a barrel of West Texas Intermediate crude oil in 2024 to average $78, compared to last year’s average price of $80, with a trading range of $95-$65 for 2024. For 2025, we look for oil prices to continue trending lower as initial forecasts call for a surplus of production next year. The core drivers behind oil prices in the long term are indeed global demand and global supply. According to the U.S. Energy Information Administration, there was modest excess demand in 2023: global consumption was 101.9 million barrels per day, while global production was 101.8 million barrels. Forecasts for the next two years now call for supply to exceed demand, which likely will keep a lid on potential oil-price spikes. Of course, there are always wild cards, such as geopolitical developments, ranging from wars (i.e., Russia’s invasion of Ukraine),