Shares of oil producers rose modestly Monday, after a Friedman Billings Ramsey analyst boosted price targets for several companies on expectations for continued crude price strength.
The Amex Oil Index rose 0.5 percent in afternoon trading, with 10 of its 13 component stocks higher. Most percentage swings were slight, less than 1 percent.
In a research report, FBR analyst Eitan Bernstein wrote that U.S. crude prices have surged past $70 in the past few months, but a large, sustained drop is unlikely due to rising demand and tight supplies. Bernstein forecasts 2007 prices of $63 per barrel, up from prior outlook for $60. For 2008-10, the analyst sees prices of $60 per barrel, up from $55.
Bernstein, though, maintained a "Market Weight" rating on the sector, with Hess Corp. rated a top pick at "Outperform."
Among the revisions, Bernstein boosted the price target for Hess to $73 from $69, Marathon Oil Corp. to $50 from $42, Murphy Oil Corp. to $58 from $55 and Occidental Petroleum Corp. to $56 from $51.
Hess shares rose 91 cents to $61.86, while Marathon Oil slipped 34 cents to $63.25.
Murphy Oil added 86 cents to $61.67, and Occidental Petroleum rose 28 cents to $60.05.
A barrel of crude dipped 39 cents to $72.42 in afternoon trading on the New York Mercantile Exchange.
Questions or comments about this story should be directed to the Financial News desk of The Associated Press at 212-621-7190.
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