Royal Dutch Shell PLC (RDS-A)
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Why trade Shell (SHEL) Shares?
In January 2025, Shell released its fourth quarter (Q4 2024) earnings data and full-year report for 2024. The report indicated that full-year adjusted profits slid to US$23.72 billion, down by 16%; the figure missed economists’ expectations. Q4 2024 earnings fell by almost 50%, coming in at US$3.66 billion on a year-on-year basis. The UK company’s management attributed the drop to reduced demand for crude oil and gas, pushing prices lower.
Despite the profit miss, Shell CEO Wael Sawan said that 2024 was a ‘very strong year’, adding that the company has the means to deliver on its promises and plans. According to Shell’s executives, the company’s share buyback programme, which has run for 13 consecutive quarters, has helped the oil and gas firm improve its position for future actions.
What influences the price of Shell?
Global economic outlook:The energy sector is one of the first industries likely to be impacted by global market upturns or downturns. Energy companies such as Shell tend to get a boost when forecasts indicate potential economic growth as demand for energy is likely to increase. Conversely, when economists forecast a possible recession, energy prices tend to drop due to an expected decline in demand.
Geopolitical tension:Another factor that could influence Shell’s share price is geopolitical unrest. Any geopolitical issue, such as war or other types of conflict, could affect energy prices and, therefore, the valuation of energy companies such as Shell.
The problem can become more severe if any of the countries involved are oil or gas producers. For example, the recent conflict in Ukraine pushed gas prices up, forcing many countries to amend their energy supply plans.
Environmental legislation:New climate protection policies implemented by many countries around the world have played a role in tightening regulatory frameworks related to climate change. Legislation tends to push businesses and consumers to shift towards renewable energy sources and drive Environmental, Social, and Governance (ESG) investing trends. While climate protection laws aim to protect the environment, energy companies such as Shell (which have to abide by these laws) tend to face higher operational costs that could, in turn, hurt their financial performance and plans.
Industry trends and performance:In the case of Shell and other ‘Big Oil’ firms, collective action by the Organisations of Petroleum Exporting Countries (OPEC), such as decisions on oil production output levels, could impact the British company’s valuation. OPEC controls less than 40% of global oil production, while its member countries account for almost 80% of global oil reserves. Therefore, decisions related to oil supply and demand affect the commodity’s price, as well as the oil and gas industry more broadly.
Financial reports can shape a company’s share price, depending on whether the set of data included is positive or negative. Financial analysts take these reports into consideration as they reflect the company’s performance during a quarter or a full year.
How can I trade Shell (SHEL) Share CFDs?
Trading SHEL Share CFDs requires opening a trading account with a regulated Forex and CFD broker. Understanding how Share CFDs work is important as traders can use these derivatives to speculate on the underlying asset’s value, in this case shares. Trading Share CFDs enable traders to open long or short positions, without owning the underlying asset. In addition, when trading Share CFDs investors have access to greater leverage, enabling them to manage larger positions with smaller initial investments.
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Royal Dutch Shell PLC (RDS-A) Trading FAQ
Although Shell’s adjusted earnings for 2024 fell below market expectations, the company’s management announced a 4% dividend-per-share increase and a new share buyback programme. Boosting profitability is one of Shell’s major goals as the UK company aims to catch up with its US competitors in terms of valuation. In order to achieve this goal, Shell has designed a turnaround strategy and is close to completing the so-called ‘first sprint’. Increasing competitiveness, maintaining discipline, and applying spending limits aiming to improve the company’s position in the global market are the sprint’s three pillars.
In March 2025, Shell hosted its Capital Markets Day, during which the company pledged to implement strategies that would deliver more value with fewer emissions. The British company’s executives stated that they have increased their structural cost reduction target to a cumulative US$5 billion - US$7 billion by 2028. Furthermore, they intend to boost LNG sales by 4% - 5% annually until 2030. On the other hand, Shell has decided to reduce offshore wind energy investments, citing increasing costs and supply chain disruptions.
The most common way investors purchase physical shares is through a cash account: unleveraged capital. By buying physical shares, investors also become partial owners. Shell Share CFDs, however, are derivative products that are more straightforward to trade (particularly when shorting shares). Another advantage Share CFDs have over physical shares is greater leverage options available.
Leverage and margin are two primary factors that allow traders to control larger positions with less upfront capital. Put simply, margin allows Share CFD traders to leverage their exposure.
For example, if Shell is trading at US$59.40 per share, purchasing 100 shares would require an initial investment of US$5,940 (US$59,40 * 100). This is an example of an unleveraged investment. However, investing in Shell through CFDs, and assuming the margin requirement is 5% (the upfront capital required to open a trade), you can trade an equivalent position size of 100 shares with US$297.00 (US$5,940 * 0.05). This way, although only putting up 5% of the notional value, the trade will reflect a full position size.
Recession is a key risk associated with trading Shell Share CFDs. Like all energy companies, an economic downturn could reduce the demand for oil, gas, and other types of energy worldwide. A dip in demand could impact Shell’s financial plans and projections, forcing investors to seek alternative investments for portfolio diversification.
Another risk factor could be new legislation related to environmental protection. In the last few years, new laws and regulations to combat climate change have come into effect, altering the ways energy companies like Shell invest and operate across the globe. Oil and gas firms have to minimise the impact of their projects on the environment, facing increased costs and regulatory limitations, thus forcing them to adjust their investment plans.
Irrespective of whether you trade Shell or any other financial instrument, depending on the trading style employed and the strategy followed, the approach will differ for each trader. However, common considerations include a well-defined Trading Plan that encompasses all of the elements of a trader’s approach. A dedicated risk management approach should be included, along with the rules of engagement for each trading strategy used.
Shorting Shell Share CFDs is possible with all reputable trading platforms, including MetaTrader 5 (MT5) and cTrader. Similar to how a trader would execute a long position, selling a Share CFD works the same way. In addition to entering other trading parameters, such as order types and trading volume, all trading platforms provide dedicated order windows to buy and sell across the global financial markets.
Opening a trading account with FP Markets gives traders access to two of the most popular trading platforms in the industry: MT5 and cTrader. As global financial markets can go up or down in a matter of seconds, a comprehensive Trading Plan should be accompanied by the right trading platform to support it. The MT5 and cTrader platforms come equipped with advanced charting tools, modern user interfaces, and Expert Advisors (EAs) to help traders achieve their financial goals.
Swap Fees (Overnight Fees):
- Long positions: -8.5%
- Short positions: 2.5%
Commission Charges:
- 0.10% commission per side
- £2 minimum charge per side
Shell’s earnings reports, whether quarterly or annual, can potentially impact the UK energy company’s market valuation. These reports reflect Shell’s financial position and include forecasts regarding the company’s future trajectory, such as projected profits, expenses and other market influencing factors that should be taken into consideration. If an earnings report is deemed positive, Shell’s share value will likely increase. If the earnings report does not meet market expectations, Shell shares will likely drop, affecting the relevant CFD trading positions.
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