An economist with Deutsche Bank raised his crude price outlook Friday, prompting revisions to price targets on some of the world's largest oil companies.
Adam Sieminski, chief energy economist for Deutsche Bank, now expects crude prices around the $120 per barrel mark for the next two years, and prices to stabilize around $100 per barrel by 2010.
The new estimates are due to a delayed reaction of worldwide supply-and-demand elasticities to high prices, and the jump in exploration and development costs, the bank said.
"Unsurprisingly, the revised commodity price deck has significant impact on future earnings and company valuation," analyst Paul Sankey said in a note to clients.
Sankey boosted his price target on Chevron to $125 from $103 and his 2008 earnings forecast to $12.38 per share from $9.92 per share.
Analysts polled by Thomson Financial expect, on average, earnings of $11.69 per share for the year.
Sankey raised his ConocoPhillips target to $110 from $96 and his 2008 earnings forecast to $14.63 per share from $10.69 per share. Analysts expect profit of $11.93 for the year.
Sankey warned, however, that "the potential for government change in Washington, D.C., is a major risk for the 'Big 5' oils _ ExxonMobil, Shell, BP, Chevron and ConocoPhillips _ particularly in the lead up to this year's election."
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