Global lockdowns drive a sharp contraction in oil demand that is likely to push oil prices lower in the short term. We estimate that LUPE’s share price reflects a Brent price of around 45-50 USD/bbl, and if oil prices continue to drop we believe this is unsustainable, leading to more downside than upside in the near term. At the same time, we believe there will be an oil price rebound later, but the magnitude of the current market imbalance makes it hard to predict when.
29 Mar 2020
Rich valuation means visible downside
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Rich valuation means visible downside
Orron Energy AB (LYV:FRA) | 0 0 1.2% | Mkt Cap: 62,875m
- Published:
29 Mar 2020 -
Author:
Daniel Stenslet -
Pages:
14
Global lockdowns drive a sharp contraction in oil demand that is likely to push oil prices lower in the short term. We estimate that LUPE’s share price reflects a Brent price of around 45-50 USD/bbl, and if oil prices continue to drop we believe this is unsustainable, leading to more downside than upside in the near term. At the same time, we believe there will be an oil price rebound later, but the magnitude of the current market imbalance makes it hard to predict when.