Shell is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2023, it produced 1.5 million barrels of liquids and 7.3 billion cubic feet of natural gas per day. At end-2023, reserves stood at 9.6 billion barrels of oil equivalent, 49% of which, consisted of liquids. Its production and reserves are in Europe, Asia, Oceania, Africa, and North and South America. The company operates refineries with capacity of 1.6 mmb/d located in the Americas, Asia, Africa, and Europe and sells about 12 million tons per year of chemicals. Its largest chemical plants, often integrated with its local refineries, are in Central Europe, China, Singapore, and North America.

The price of a barrel of the crude oil benchmark grade West Texas Intermediate has fluctuated between $65 and $80 over the past year and is currently near the midpoint of that range. Oil prices are down sharply from the $$115-120 level, touched back in 1H22 when Russia invaded Ukraine. For 2025, we are anticipating an average price of $75, up slightly from current levels but lower compared to $77 in 2024, $80 in 2023 and $95 in 2022. Our forecast trading range for the year is $65-$85. The core drivers behind oil prices over the long term come from Econ 101: global supply and demand. According to the U.S. Energy Information Administration, there will be an excess supply of oil in 2025: global consumption is estimated at 104.1 million barrels per day, while global production is estimated at 104.4 million barrels. Early forecasts for 2026 also call for supply to exceed demand, which likely will provide a ceiling for oil prices. Of course, there are always wild cards such as geopolitical developments, ranging from tariffs, to wars, to sanctions, to the ongoing turmoil in the Middle East. The growth path of the Chinese economy also plays an outsized role in the direction of oil prices, and growth in India may eventually have a greater impact than it does today. These wild cards can cause prices to fluctuate dramatically. That said, absent the wild cards, the global supply-demand outlook suggests that the days of triple-digit oil prices are in the rear-view mirror as the world economy pivots toward cleaner energy solutions.

The Portfolio Selector features the Argus Focus List, a group of 30 "best idea" stocks generated and regularly updated by Argus' analysts and investment policy committee. It also includes the director of research’s monthly investment strategy column, stock recommendations and sector picks, economic forecasts, and an asset allocation model. This month, the Focus List additions are Ameriprise Financial Inc (AMP); Baker Hughes Co (BKR); Packaging Corp of America (PKG); Cloudflare Inc (NET) and the Focus List deletions are American Intl Grp In (AIG); DuPont de Nemours Inc (DD); Palo Alto Networks Inc (PANW); Shell Plc (SHEL).

Shell plc is an Anglo-Dutch multinational oil and gas company. The firm was created by the merger of Royal Dutch Petroleum and UK-based Shell Transport & Trading. It is the seventh-largest company in the world in terms of revenue and one of the six oil and gas 'supermajors'.