Austrian Erste Recommends "Accumulate" To Romanian Petrom Shrs

"Despite the not-yet visible results of restructuring, we want to highlight Petrom, due to its strong exposure to the upstream segment. As we expect a rise in the crude oil price, our recommendation on Petrom is accumulate, with a target price of RON0.17," Erste said in a report.

Tuesday, at GMT11:17, Petrom shares on the Bucharest Stock Exchange were trading at RON0.1540 per share, up 4.05% on the day.

Despite the announced lower production targets and lower valuation, namely at EUR39 per share, Erste analysts still recommend “Buy” on OMV shares.

"Its strong exposure to the upstream segment looks to be an advantage, due mainly to the expected increase in the crude oil price in the coming months," according to the cited source.

In exchange, Erste analysts downgrade MOL to Accumulate, from Buy, and lower the 12-month target price to HUF13,000 (EUR1=HUF308.18). Despite the still positive recommendation on the stock, the analysts recommend cautiousness in buying MOL, due to its heavy exposure to the worsening economic environment in Hungary.

The analysts expect 40% lower refining margins on the year in 2009.

Analysts said a decline of oil consumption of 1.6 million barrels per day is expected for 2009 in comparison with 2008. This situation led to repeated cuts of estimated 2009 consumption by the International Energy Association.

"We expect the oil price (Brent) in the range 55-65 USD per barrel during this year’s summer and in the range 60-75 USD per barrel at the end of the year," according to Jakub Zidon, analyst with the oil and gas sector and author of the report.