Overview#
Piper Sandler, a financial services firm, has upgraded its ratings for Occidental Petroleum and Murphy Oil from Neutral to Overweight. This decision comes after the firm raised its mid-cycle oil price forecast, anticipating tighter crude oil supplies and potential disruptions due to ongoing conflicts in the Middle East, particularly involving Iran.
Oil Price Forecast#
The firm has increased its forecast for West Texas Intermediate (WTI) crude oil prices from $70 to $75 per barrel. This adjustment reflects a significant change in global oil supply estimates, projecting a shift of over 2 million barrels per day by 2026. The uncertainty surrounding the Iran conflict could lead to lasting impacts on oil supply and a reduced capacity to meet demand starting in the latter half of 2026.
Occidental Petroleum Insights#
Piper Sandler has raised its price target for Occidental Petroleum from $54 to $66. The firm notes that Occidental is one of the leading operators in the Delaware Basin, maintaining strong performance despite some declines in 2025 results. The company's 2026 guidance indicates improved capital efficiency, with expected spending about $800 million less to maintain similar production levels. Piper believes these efficiency gains are sustainable and should not negatively impact the stock in the near future.
Murphy Oil Update#
Murphy Oil has also been upgraded to Overweight, with its price target increased from $33 to $41. The firm points out that Murphy's stock has underperformed due to disappointing exploration results in Côte d'Ivoire and weaker guidance for 2026. However, Piper Sandler sees potential for significant operational leverage and anticipates that further appraisal work at the Hai Su Vang project in Vietnam could serve as a catalyst for growth in the first half of 2026. Investors may begin to recognize the long-term resource potential of Murphy in Vietnam.