ConocoPhillips Forecasts Oil Price Floor at $70 Amid Global Demand Challenges
ConocoPhillips Chairman Ryan Lance recently set a price floor for oil at $70, with mid-cycle WTI prices expected between $65 and $70. This outlook suggests sustained higher prices that could boost oil company profitability. Lance also noted that global demand recovery may not fully rebound until 2028 or 2029, with ongoing pressures from conflicts like the Iran war affecting supply chains and market stability.
ConocoPhillips is shifting its focus towards upstream exploration, prioritizing oil production to meet anticipated demand growth. Meanwhile, Saudi Aramco CEO Amin Nasser warned that rebuilding global oil inventories, currently at about 10 billion barrels after losing 3 billion due to conflict, could take up to two years, impacting long-term supply-demand dynamics.
Analysts at UBS raised ConocoPhillips' price target to $169 from $153, maintaining a Buy rating. They highlighted the attractiveness of energy stocks amid higher oil prices, which strengthen balance sheets and support valuation upside. However, Goldman Sachs recently downgraded ConocoPhillips, removing it from the firm's US Conviction List.
Separately, Venture Global and ConocoPhillips signed a 20-year LNG agreement, with ConocoPhillips purchasing 1.0 million tonnes per annum starting in 2030. This partnership underscores market confidence in Venture Global's LNG capabilities and its commitment to sustainability through carbon capture initiatives.