The oil and gas sector is set for another good year in 2002, according to Deutsche Bank, which raised its Brent oil price assumption for next year by 18% to US$75 per barrel.
In a note on the oil and gas sector, the German bank said there is evidence that Brent oil prices are entering “a possibly long period” of support around US$70 per barrel, while gas prices are at risk of remaining at well above historic "normal" levels for at least half of 2022, “if not indefinitely”.
“The free cash flow outlook is robust, shareholder distribution is poised to rise further and net debt simultaneously set to continue falling,” Deutsche Bank said, lifting its sector forecasts for next year by an average of 17% for EPS and its price targets by an average of 14%.
The bank reiterated Royal Dutch Shell PLC (LSE:RDSB) as its top pick, followed by TotalEnergies, Repsol and BP PLC (LSE:BP.).
It kept its Buy rating on Shell and raised its price target to 2,038p, while BP’s rating was raised to Buy from Hold with a target of 404p.
Shell shares rose by just over 1% to 1,650p, while BP was 1.75% higher at 342.50p.