Market Report: Shell stumbles as oil giant slashes its asset valuations

Never Sell Shell, the old stock market adage that’s been undone by the pandemic, came under more strain today when the oil giant slashed its valuation on more assets.

The latest adjustments worth up to $4.5 billion combined with the wider market sell-off to send blue-chip Royal Dutch Shell shares down by 4% or 49p to 1,292p.

The heavyweight stock had been trading at more than 2300p before Covid-19 forced oil prices sharply lower and prompted Shell to cut its dividend for the first time since World War Two, writing down the value of its assets by $16.8 billion in the process.

In today’s fourth quarter trading update, the company revealed new impairments in relation to its Appomattox field in the Gulf of Mexico and from lower valuations in LNG.

Shell’s upstream oil and gas production should be slightly higher than the previous quarter, despite US hurricanes and the demand impact of mild weather in northern Europe.  

The share price fortunes of Shell’s rival BP were no better after the price of Brent crude dived 4% amid the latest tightening in Covid-19 restrictions.

BP was down 13.1p to 258.25p as the FTSE 100 index fell 84.85 points to 6,444.33.