By Samuel Indyk
Investing.com – Oil titans BP and Royal Dutch Shell were both trading higher on Tuesday as elevated oil prices continue to support the shares. The two companies have traded higher for ten of the last 11 trading days.
Energy prices have been rising and yesterday’s gave propelled both and crude futures to multi-year highs.
The cartel which includes the members of OPEC and allies, including Russia, maintained its plan to (bpd) in November, when some analysts had expected the group to further increase production.
WTI traded above $78/barrel for the first time November 2014 while Brent traded just short of $82/barrel at its highest level since October 2018.
The increase in and power prices in Europe and Asia is also helping lift oil prices. Due to the surging price of nat gas, there is an expectation that some gas-fired power plants may switch to using oil. Saudi Aramco (SE:) stated on Monday that a temporary shift to oil from natural gas to generate power could add an additional 500,000 bpd to oil demand.
UK Share Prices
As oil prices have risen, so have the shares of oil companies. Royal Dutch Shell (LON:) and BP (LON:) have both risen over 17% in the last month. Year to date gains are over 30% for both companies.
Smaller energy companies have also benefitted with Tullow Oil (LON:) rising over 23% in the last month.
However, those gains pale into insignificance when compared to troubled energy services provider Petrofac (LON:).
The company recently pleaded guilty to seven bribery offences in a deal with the UK’s Serious Fraud Office and was given a penalty of just $95 million, below what some analysts had expected. With the case now closed, Petrofac may also be able to bid for projects in regions where it had previously been suspended, such as Abu Dhabi and Saudi Arabia.
Shares in the energy company are up around 65% in the last month.
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