Shell share price was in the red earlier on Wednesday amid a cooldown in inflation in the UK. At the time of writing, the SHELL stock was trading slightly lower at 2418.5p. It has a total market capitalization of £169.079 billion.
Shell share price has been under intense pressure for the past few days amid uncertainties around China’s economic recovery. China’s Gross Domestic Product (GDP) expanded by 3% in 2022, missing the official target of around 5.5%. This was the country’s second-worst performance since 1976.
However, the easing of China’s strict Covid-19 curbs has left investors optimistic that a recovery in fuel demand from the world’s top oil importer is imminent. In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) said that Chinese oil demand would grow 510,000 barrels per day this year.
Oil prices have been on a consecutive uptrend this week after China posted weakly but expectation-beating annual economic growth. At the time of writing, US West Texas Intermediate (WTI) crude oil was trading 0.81% higher at $80.83, while Brent crude was up by 0.54% at $86.38 per barrel.
The European stock market was mixed on Wednesday after UK inflation fell for the second month. Data by the Office for National Statistics show that the UK Consumer Price Index (CPI) for the 12 months to December 2022 rose by 10.5%, down from 10.7% in November. Despite the slip in inflation, the inflation rate is still hovering around its highest level in 40 years as the cost of living crisis in the country rises.
Shell Share Price Forecast
Shell share price extended this week’s losses on Wednesday as inflation in the UK cooled down in December. However, the stock has managed to remain above the 25-day and 50-day exponential moving averages. Its Relative Strength Index (RSI) is in the neutral zone.
The Shell stock price is likely to continue falling before staging a recovery later. If this happens, sellers will be targeting the next support at 2363p. On the other hand, a move past the resistance at 2565.5p will invalidate the bearish thesis.