The current oil price slump offers a chance to snap up quality oil stocks such as Lekoil (LON:LEK) and Tullow Oil (LON:TLW), a broker says.
Westhouse Securities said sentiment rather than facts was driving oil prices and concerns about a global oil supply glut were overdone.
Investors should regard it as an "excellent opportunity" to snap up shares in Africa-focused explorer Lekoil (LON:LEK), which focuses on Nigeria and West Africa.
Lekoil said last week that it had begun oil production from the Otakikpo marginal field on the shoreline in the south-east Niger Delta.
Westhouse also recommended buying Tullow, which operates in east and west Africa, Norway and Caribbean-Guyanas.
The broker's Mark Henderson said the industry was not facing an outlook worse than that of 1985/86.
He said there was little spare capacity in oil cartel OPEC, demand was not falling catastrophically and other than US shale, non-OPEC production had not grown in the last five years.
"We maintain that the supposed global oil supply glut could dissipate much quicker than market consensus believes and suggest the current low oil price provides an excellent opportunity to buy quality exploration and production stocks," he said. "Our favoured stocks are Tullow (Buy, target price 590p) and Lekoil (Buy, TP73p)."
Shares in Lekoil rose 0.62p to 23p in London afternoon trading. Tullow's stock lifted 7.3p to 200.1p.