Increased Target price at Morgan’s, page-30

FNAREA published an article 10th October on Broker Upgrades and their reasoning of which as summary is below:

Consensus price: $2.98
Morgans: $3.95 (up)
Macquarie $3.00 (up)
Morgan Stanley: $1.98 (down)
Barrenyjoey: $2.32 (up)

Nothing new here but :

Upside:

• production guidance higher on successful Bauna campaign
• Success at Patola
• Further discovery and drilling at Neon-Goia or further M&A activity

Downside:

• Global demand from recession causing a drop in the price of oil.
• Poor result at Patola

Source: FNARENA
In reaction to OPEC’s move, Citi raises its forecast December quarter 2022 Brent average price to US$97/bbl from US$85/bbl, while increasing its 2023 forecasts to US$88/bbl from US$75/bbl. The medium-term price forecast is raised to US$75/bbl in 2024, and toward US$65/bbl thereafter.

In the broker’s hard-landing scenario, global economic growth will fall to zero in 2023 from a base case of 2.1% growth, while global oil demand growth could fall to zero from 2.2mb/d.The economic impact on oil demand is more exaggerated because of the typical macro-induced slowdown in oil consumption, as well as a slower recovery of the aviation sector, which was supposed to super-charge oil demand growth in 2023, explain the analysts.
Recessions normally result in falling commodity prices, leading to surpluses, which then require a further fall in price. However, Citi suggests further production cuts by OPEC may limit price declines to around the US$70/bbl mark.