Oil stocks to get more expensive: Expect M&A activity to accelerate
Oppenheimer believes oil prices have bottomed with upside potential significantly greater than any near-term correction, but they also don't expect a sharp rebound in oil prices anytime soon. They put equally low probability on Brent oil (BNO) prices below $50 or above $90 with greater probability on oil prices in the $65-$75 range. They think the energy industry is beyond the initial shock and denial phase and will soon enter the panic and capitulation phase, which could trigger what they believe is a much-needed industry consolidation. Given XOM's $300B treasury shares, no acquisition is too big.