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Why BofA Projects 'Continued Recovery In Oil Prices'

Why BofA Projects 'Continued Recovery In Oil Prices'

The strength of the rebound in U.S. oil and gas stocks over the last month is justified, but the sector has yet to fully price in a recovery, according to BofA Securities.

The Oil & Gas Analyst: Doug Leggate maintained Buy ratings on Exxon Mobil Corporation (NYSE: XOM), Occidental Petroleum Corporation (NYSE: OXY) and Chevron Corporation (NYSE: CVX) with price targets of $74, $29 and $97, respectively.

The Oil & Gas Thesis: This has been among the best performing sectors since Pfizer Inc. (NYSE: PFE) announced positive Phase 3 data from its COVID-19 vaccine trials, Leggate said in a Monday note.

“But with OPEC’s intention confirmed, intent to continue its intervention policy, two of the critical inputs to achieve our commodity team’s oil price outlook appear to be falling into place to improve confidence in a continued recovery in oil prices at least in line with our long term $55 Brent view in a balanced market,” the analyst said. 

BofA's commodity team suggests Brent crude oil will reach $60 per barrel sometime in the first half of 2021.

The oil recovery is in “the early stages — led by paper markets, but still to be confirmed by physical supply/demand balance — which is where the role of the vaccine and continued intervention by OPEC comes into play.”


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Posted-In: BofA Securities Doug Leggate OilAnalyst Color Commodities Reiteration Markets Analyst Ratings Best of Benzinga

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