WTI crude is up by 4.5% to $48.34 per barrel, while Brent crude is increasing by 5.02% to $51.72 per barrel this morning, according to the CNBC.com index.
U.S. crude oil production is expected to fall to 8.86 million barrels per day in 2016, from an estimated average of 9.25 million barrels per day in 2015, according to the U.S. Energy Information Administration.
Total world production is expected to average 95.55 million barrels per day this year and rise to 95.68 million barrels per day next year, but consumption is also expected to grow in the same period, from 93.79 million barrels per day to 95.2 million barrels.
"I see the first mixed signs for recovery of oil prices," Royal Dutch Shell CEO Ben van Beurden said at an industry conference in London, Reuters reports. "But with U.S. shale oil being more resilient than we originally thought and a lot of oil still in stock, it will take some more time to rebalance demand and supply."
Separately, TheStreet Ratings team rates ROYAL DUTCH SHELL PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate ROYAL DUTCH SHELL PLC (RDS.A) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- RDS.A's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- RDS.A, with its decline in revenue, slightly underperformed the industry average of 34.6%. Since the same quarter one year prior, revenues fell by 34.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Net operating cash flow has decreased to $6,050.00 million or 29.98% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROYAL DUTCH SHELL PLC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full analysis from the report here: RDS.A