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Stock Markets March 12, 2026

Piper Sandler Raises Mid-Cycle Oil Forecast, Upgrades Occidental Petroleum and Murphy Oil

Analyst lifts WTI mid-cycle view to $75 and raises price targets as supply risks and efficiency gains shape outlook

By Sofia Navarro OXY
Piper Sandler Raises Mid-Cycle Oil Forecast, Upgrades Occidental Petroleum and Murphy Oil
OXY

Piper Sandler raised its mid-cycle forecast for West Texas Intermediate crude to $75 a barrel from $70 and upgraded Occidental Petroleum and Murphy Oil to Overweight from Neutral. The brokerage cited a more than 2 million barrels-per-day swing in its 2026 global oil balance, lingering uncertainty tied to the Iran conflict, and company-specific developments that underpin higher price targets for both producers.

Key Points

  • Piper Sandler raised its mid-cycle WTI price forecast to $75 a barrel from $70, citing a swing of more than 2 million barrels per day in its 2026 global oil balance estimates.
  • Occidental Petroleum was upgraded to Overweight with a price target raised to $66 from $54, supported by operating strength in the Delaware Basin and an expected $800 million reduction in 2026 spending for similar production.
  • Murphy Oil was upgraded to Overweight with a new price target of $41 from $33; the brokerage cited operating leverage and potential appraisal catalysts at the Hai Su Vang project in Vietnam during H1 2026.

Piper Sandler on Friday upgraded Occidental Petroleum and Murphy Oil to Overweight from Neutral after increasing its mid-cycle forecast for West Texas Intermediate crude to $75 a barrel from $70. The brokerage said the forecast change stems from a reworking of its 2026 global oil balance that now shows a swing of more than 2 million barrels per day.

The firm highlighted that uncertainty remains over how long the conflict involving Iran will continue, noting the potential for a lasting supply effect. Piper Sandler said that reduced spare capacity could become more pronounced beginning in the second half of 2026, and that higher prices further out on the futures curve will likely be needed to spur fresh investment in production.

Occidental Petroleum

Piper Sandler raised its price target for Occidental to $66 from $54. The brokerage described Occidental as one of the stronger operators in the Delaware Basin and said the company has continued to deliver solid operating performance despite a decline in results during 2025. In addition, Piper pointed to Occidental’s 2026 guidance as evidence of improved capital efficiency, noting the company plans to spend roughly $800 million less while supporting a comparable level of production.

The firm added that Occidental’s efficiency gains appear sustainable and that concerns about the durability of those gains are not expected to weigh on the stock in the near term.

Murphy Oil

Piper Sandler also upgraded Murphy Oil to Overweight and lifted its price target to $41 from $33. The brokerage said Murphy’s shares have lagged following weaker-than-expected exploration results in Côte d’Ivoire and softer 2026 guidance, contributing to a sharp decline in the company’s relative performance versus the sector.

Piper noted that Murphy offers significant operating leverage and identified a possible catalyst in further appraisal work at the Hai Su Vang project in Vietnam during the first half of 2026. The firm added that investors may increasingly attribute value to Murphy’s longer-term resource potential in Vietnam as appraisal and development updates arrive.

The revisions reflect Piper Sandler’s updated view of crude market balances and company-specific operating dynamics. The brokerage’s action raises both firms’ price targets and moves their ratings to Overweight in light of a tighter expected market and potential near-term drivers for production and resource appraisal.

Risks

  • Uncertainty around the duration of the conflict involving Iran could produce lasting supply disruptions and tighten spare capacity beginning in the second half of 2026 - impacting oil producers and the broader energy sector.
  • Weaker-than-expected exploration results and softer guidance, as cited for Murphy Oil in Côte d’Ivoire, can depress relative performance and delay value realization for exploration-focused companies.
  • Sustained higher prices further out along the futures curve may be necessary to encourage investment in production, meaning market rebalancing depends on both supply-side developments and future price trajectories.

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