Canadian oil cos. jump on oil's rise, Goldman view

Shares of Canadian oil companies climbed on Friday as crude prices rose and an analyst raised price targets for Canadian oil stocks on expectations that oil prices will rebound and operating and capital costs in Canada's oil sands region will decline.

Crude oil prices increased $1.78, or 3.5 percent, to $52.90 in afternoon trading.

Goldman Sachs analyst Arjun Murti upgraded Suncor Energy Inc. to "Buy" from "Sell" and added it to Goldman's "Conviction Buy List." He also upgraded shares of Petro-Canada to "Buy" from "Sell," given its pending merger with Suncor.

Murti believes Suncor is well positioned to benefit from the expected crude oil rebound, which he estimates will experience an upturn starting in the second half of 2009. Murti raised the company's price target to $33 from $25. For Petro-Canada he bumped up the price target to $42 from $29.

Shares of Suncor climbed $1.75, or 6.9 percent, to $27.11 in Friday trading.

Goldman analyst Brian Singer said he expects rising oil prices will boost earnings for Canadian Natural Resources Ltd., and raised his price target to $55 from an earlier estimate of $47. But Singer maintains a "Neutral" rating for the company as he sees slightly better returns and near-term opportunities for the firm's "Buy" rated integrated oils and exploration and production companies.

Shares of Canadian Natural Resources gained $1.86, or 4 percent, to $47.97.

Singer also rated Nexen Inc. "Neutral" due to uncertainty related to its performance at its Long Lake oil sands project and its ability to maintain or grow production in other areas. Most of the company's legacy asset base is mature, Singer said, which will likely result in declining production in the years ahead.

Still, rising oil prices will help its earnings per share, Singer said, raising the company's price target to $23 from an earlier target of $20.

Nexen shares rose 71 cents, or 3.7 percent, to $19.80.