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Has Short Interest in Shell Declined in Q2 2018?

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Short interest in Shell

In the previous part, we reviewed changes in institutional holdings in Royal Dutch Shell (RDS.A). In this article, let’s look at changes in Shell’s short interest.

Shell has observed a fall in its short interest (percentage of outstanding shares) from 0.22% on April 2 to the current level of 0.11%. This indicates that the bearish sentiment for Shell stock has decreased. During the same period, Shell’s stock price has risen 13.0%.

Why the change in sentiment?

The fall in short interest in Shell stock since April 2 could be due to higher oil prices and updates on its upstream projects. Since April 2, WTI (West Texas Intermediate), the benchmark oil, has risen 5.0%. Oil prices are relevant to integrated energy companies, as they play a key role in determining a company’s upstream earnings. 

Shell announced significant upstream project updates in the second quarter, which we discussed earlier in this series. This event could have supported positive sentiment for Shell during this period.

Peers’ short interest

Shell’s peers Total (TOT), Equinor (EQNR),[1. formerly known as Statoil] and YPF (YPF) reported increases in their respective short interest levels by 0.02%, 0.02%, and 0.24% since April 2. Currently, TOT, EQNR, and YPF have short interest levels of 0.06%, 0.14%, and 0.49%, respectively. 

During this period, TOT and EQNR have seen a rise in their stock prices by 10.0% and 17.0%, respectively. However, YPF stock declined 16.0% in the same period.

For more information on the second-quarter performance of integrated energy stocks, please read Ranking the Returns of 6 Major Integrated Energy Stocks.

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