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'.

May Bounce-Back: Our Monthly Survey of the Economy, Interest Rates, and Stocks

The current price of a barrel of the crude oil benchmark grade, West Texas Intermediate, has fallen below the $80 level, as we had expected. That's down from a high near $90 in April but still up 8% from the start of the year. We look for prices to stabilize at these levels for the next few quarters -- despite the onset of the summer driving season -- while global economic growth remains under pressure due to high interest rates. We now look for a barrel of West Texas Intermediate crude oil in 2024 to average $78, compared to last year's average price of $80, with a trading range of $95-$65 for 2024. For 2025, we look for oil prices to continue trending lower as initial forecasts call for a surplus of production next year. The core drivers behind oil prices in the long term are indeed global demand and global supply. According to the U.S. Energy Information Administration, there was modest excess demand in 2023: global consumption was 101.9 million barrels per day, while global production was 101.8 million barrels. Forecasts for the next two years now call for supply to exceed demand, which likely will keep a lid on potential oil-price spikes. Of course, there are always wild cards, such as geopolitical developments, ranging from wars (i.e., Russia's invasion of Ukraine), to sanctions (Iran, Venezuela), to the turmoil in the Middle East. The growth path of the Chinese economy also plays an outsize role in the direction of oil prices. These wild cards can cause prices to fluctuate dramatically. That said, absent the wild cards, the global demand-supply 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.

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.