Rising price targets in the oil sector

Jefferies raises 2023 oil price forecast to USD 84 a barrel as Saudi Arabia extends production cut by 1 million barrels per day.
BP risks a decline in share buyback expectations, while Shell could surprise on the upside despite weak sentiment. GALP is expected to deliver good third quarter results and continue to outperform. Across the energy sector, earnings are expected to grow 29% quarter-on-quarter, 10% above consensus expectations. BP, Repsol and GALP are considered promising, particularly due to their refining activities. Analysts expect higher share buybacks at BP. Sentiment has deteriorated at Shell, but positive company statements are expected. ENI and Repsol have room for share buybacks, but must take excess profits taxes into account. GALP has the highest potential based on 2024 forecasts. The European energy sector offers attractive returns and could offer potential for higher payouts of 2 to 3% in 2024 if spot prices persist, with Shell and ENI favored. (Source: Bloomberg, Dow Jones, October 2023)

In this context we present the following opportunity:

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