Oil Pushing Toward $90 in Months Ahead-Citigroup
Source: Dow Jones Newswires, Brendan Conway (1/11/10)
"In the medium term we expect prices to push toward $90/barrel, though we are less optimistic about 2010 as a whole."
Citigroup Global Markets analysts upgraded their Chevron and BP investment ratings to buy from hold after the firm's oil analysts targeted oil's per-barrel price around $80 in the long term, up from $65.
"In the medium term we expect prices to push toward $90/barrel, though we are less optimistic about 2010" as a whole, analyst Faisel Khan wrote. The firm expects that trend to push the stocks higher, raising its Chevron price target to $97 per share from $78 and the BP target to GBP6.80 from GBP6.
Chevron was singled out as "the most levered name to oil" in the analysis. Its stock has "the greatest valuation sensitivity to changes in oil prices" versus its peers, the analysts wrote.
Many Wall Street equity analysts expect oil prices to rise in 2010, and many have favorable outlooks on oil stocks. But Citigroup's sector call appeared to grab some attention in the market Monday. Chevron shares rose 1.2% to $80.40 in premarket trading. BP PLC was also up.
Besides Chevron and BP, Citigroup raised its investment outlook for Petrobras Petroleo Brasileiro (PBR), to buy from hold.