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Research Alert: Integrated Oil & Gas Fundamental Outlook: Neutral, But Reflecting Mixed Views

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

WTI crude oil sits at $101/b today vs. $67/b before U.S. attacks on Iran on February 28, with the Strait of Hormuz largely closed creating an 11-12 mmb/d supply shortage. Independent refiners reported strong Q1 margins, while April CPI hit 3.8%, the highest in three years. We remain neutral on Integrated Oil & Gas, liking downstream but wary of upstream prospects given mixed fundamentals. We estimate WTI averaging $99/b in 2026 but see it falling to $63/b in 2027 due to adverse economic effects on the broader global economy, and UAE departing OPEC, presuming Strait reopening in 2H 2026. We think refining has tailwinds from wider Brent-WTI spreads at $6/b vs. normalized $3.50-$4.00/b and reduced U.S. capacity after two California refinery closures. We anticipate wider refining margins in 2026 and likely into 2027, while most of our upstream EPS estimates are below consensus for 2027.

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