Oil Search shares have rallied too hard and are now overvalued...

Oil Search shares have rallied too hard and are now overvalued as they imply a Brent crude oil price of $US60, according to Macquarie Equities.The broker cuts Oil Search to Underperform and Carnarvon Petroleum to Neutral, even as it lifts its 2021 average crude oil price forecast by 3.1pc to $US50 a barrel, although its 2022 forecast falls 4.9pc to $US53.75.Strong early vaccine results have provided improved visibility to an eventual normalization in demand despite challenged near-term fundamentals amid surging winter COVID cases in the US and Europe as well as tensions within OPEC+. But Macquarie’s list of energy sector buys has gotten shorter following a strong rally in the sector.It prefers Woodside, Beach, Karoon and Senex.