Based on SASOL (SOL) share price movements it seems to be loving the higher oil price

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​Date: 4 June 2018
In this update we take a look at the recent share price movements of fuel and petrochemicals giant, Sasol (SOL) and find it's share price sure is loving the recent uptick in crude oil prices and the higher fuel prices in South Africa

Up up and away?

The image below shows the SASOL share price on an interactive candlestick chart for the lat 5 years. And as users can see, there has been a significant uptick in the share price in recent years.

Percent change:

2017

The image below shows the share price movement for SASOL for 2017: And as it shows it returned just over 7% for investors over the course of 2017. While just over 7% doesnt sound like much, it was still higher than inflation and does not take any dividend payments into account.
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SASOL (SOL) share price for 2017

2018 so far

The image below shows the share price movements of SASOL for 2018 so far, and for 2018, it has already increased by 12.45%, far outstripping inflation as well as the returns achieved by SASOL for the whole of 2017.
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SASOL (SOL) share price for 2018
And there are two major drivers of the SASOL (SOL) share price, and they are the ruling crude oil prices as well as the Rand/Dollar exchange rate. The weaker the exchange rate the better the reported earnings from SASOL when reported in Rands. The higher the crude oil price, the greater their profit margins, especially when they sell petrol at a specific price linked to crude oil prices, but they can make fuel from Coal and gas. 

So investors should not be surprised of SASOL (SOL) reports pretty fat numbers for the 2018/2019 financial years as they are highly geared towards benefiting from higher crude oil prices.

Only worry for SASOL shareholders is just how much money SOL has lost in recent times at shale gas exploration plants etc, when low crude prices basically made it impossible to use shale gas to make fuel at a profit rate. Lots of rumors that OPEC pushed crude prices lower by pushing up supply of crude oil, in order to force shale gas producers to abandon such projects prolonging the dependence of the world on crude most supplied by OPEC.

But all this considered the current crude oil prices bodes very well for SASOL (SOL) profits over the next 12/18months.

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