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Has Short Interest in Shell Fallen prior to Its 1Q18 Earnings?

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Apr. 13 2018, Updated 7:31 a.m. ET

Short interest in Shell

Short interest in Royal Dutch Shell (RDS.A) expressed as a percentage of its outstanding shares has fallen from 0.20% on February 27, 2018, to its current level of 0.16%.

Usually, with all else being equal, a fall in short interest could indicate a fall in the bearish sentiments surrounding a stock. During this period of falling short interest, Shell stock has risen 4.1%.

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Why the changes in short interest?

Since January 2018, Shell has observed several factors that could have affected the sentiments surrounding its stock. The change in sentiments may have been due to a rise in oil prices and better-than-expected 4Q17 earnings. This was partly offset by the fall in the refining crack and weaker broader markets.

In 1Q18, quarter-over-quarter, while oil prices have risen on an overall basis, refining cracks have fallen. Oil prices significantly affect upstream earnings. WTI prices, considered on a quarterly average, have risen 21% quarter-over-quarter to $63 per barrel in 1Q18. However, the benchmark refining crack, the USGC (US Gulf Coast) WTI 3-2-1, which affects downstream earnings, has fallen 16% quarter-over-quarter to $15 per barrel in 1Q18.

Peers’ short interests

Shell’s peers Total (TOT) and ENI (E) have also witnessed falls in their short interests by 0.02% and 0.01%, respectively, since February 27. Currently, TOT and E have short interests standing at 0.08% and 0.02%, respectively. Also, Suncor Energy (SU) has seen a 0.05% fall in its short interest since February 27. Short interest in SU currently stands at 2.2%.

Since February 27, TOT, E, and SU have risen 3.3%, 9.9%, and 6.0%, respectively.

Pre-earnings series overview

In this series, we’ve reviewed Shell’s EPS (earnings per share) estimate and segmental earnings prospects for 1Q18. We’ve also evaluated Shell’s stock performance and moving average trend, and we’ve calculated the stock price forecast range for Shell for the 17-day period leading up to April 26, 2018, based on its current implied volatility.

In the previous article, we looked at analysts’ ratings for Shell. We’ve concluded the series with a review of short interest in Shell before its earnings.

Check out all the data we’ve added to our quote pages. Now you can get a valuation snapshot, earnings and revenue estimates, and historical data as well as dividend info. Take a look!

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