Bloomberg News

Renaissance Cuts Russian Oil Company Estimates on Crude Prices

October 21, 2008

Renaissance Capital cut its price estimates for energy producers in Russian and other former Soviet republics by 35 percent on average after oil prices fell.

``The world has been too optimistic on crude demand growth,'' analysts including Alexander Burgansky and Elena Savchik said in a note to investors.

Moscow-based Renaissance lowered its 2009 forecast for average Brent crude prices by 26 percent to $70 a barrel, and its forecast for 2010 by 11 percent to $80 a barrel. Brent has fallen 20 percent this year to close at $72.30 yesterday, and reached a record $150 in July.

Renaissance slashed its 12-month target price for OAO Rosneft, Russia's largest oil producer, 45 percent to $8.60. Smaller rival OAO Lukoi was cut 39 percent to $95, while OAO Gazprom, the world's largest gas producer, was reduced 13 percent to $16.60. The investment bank reiterated ``buy'' recommendations on all three stocks.

To contact the reporter on this story: Greg Walters in Moscow

To contact the editor responsible for this story: Guy Collins in London

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