Oil: Brent to recover to USD 43/bbl by year-end – UBS

Economists at UBS are confident to see a recovery in oil prices later in the year.

Key quotes

“Energy stocks have a small index weight and sector valuations have also moved to price in the weaker outlook, with the S&P 500 energy sector trading at a 70% discount on price-to-book relative to the index as a whole.” 

“While the oil market is heavily oversupplied this quarter, we expect it to move toward balance next quarter and become under-supplied in 4Q this year as lockdown restrictions are eased and oil demand picks up.” 

“We forecast Brent to recover to USD 43/bbl by year-end.”