UBS lift oil price forecasts

UBS has raised its oil price forecast in the wake of the recovery in prices, though it cautions the build up of inventories will take time to clear.

The broker lifted its 2020 Brent oil forecast to $US42.30 a barrel from $US35.30 a barrel and raised its 2021 forecast to $US50 a barrel from $US47.50 a barrel.

Its West Texas Intermediate estimate for 2020 was increased to $US37.50 from $US36.50, while its 2021 forecast was raised to $US45 a barrel from $US42.50 a barrel.

UBS says demand reached an inflection point in April and it expects markets to head back to balance in the second half of 2020.

The higher oil price estimates translated into higher price targets for key energy stocks.

Oil Search's price target was lifted to $4.30 a share from $4 a share, while Woodside Petroleum's was raised to $27 a share from $26 a share.

Santos' price target was increased to $6 a share from $5.75, while Origin Energy's was lifted to $7.55 share from $7.40 a share.