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FX.co ★ Shell posts huge losses due to COVID-19

Shell posts huge losses due to COVID-19

Shell posts huge losses due to COVID-19

The shattered oil market is trying to cope with the aftermath of the coronavirus. No wonder, the losses of industry giants are truly enormous. Thus, oil giant Royal Dutch Shell has posted almost $20 billion loss as the coronavirus pandemic has hammered demand for oil and gas. To be more precise, the world's largest oil producer recorded a loss of 18.1 billion for the second quarter of 2020. As a result, the company’s net profit slumped by 82%. Due to the massive lockdown measures taken all over the world to curb the spread of the virus, global oil consumption has drastically reduced. A sharp drop in fuel demand has inevitably affected oil prices. Unfortunately, the outlook for crude prices for the year-end remains rather gloomy. According to forecasts, Brent crude oil prices will average $30 per barrel during the second half of 2020, $40 per barrel in 2021, and $50 per barrel in 2022. Obviously, the golden age of oil is coming to an end. The times when oil could reach $150 per barrel are left far behind. Shell now anticipates significantly lower oil and gas prices over the next 30 years. Amid such forecasts, it is not surprising that Shell has decided to cut its dividend to shareholders for the first time since World War II. Following the company’s financial report, the shares of Shell lost around 2% in value.


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