Oil price 'will drive 20% earnings growth in Russia'

The soaring price of West Texas Intermediate (WTI) oil is set to hit $90 dollars a barrel this year, adding 20% to the earnings forecasts of Russian oil producers, says HSBC.

The revised 2011 oil price forecast, up from $80 a barrel on the back of civil unrest in the Middle East and heightened demand, could further boost the Russian equity market, with Russian names trading at 7.2x 2011 earnings, versus global peers at 11.1, the group believes. Douglas Helfer, manager of the HSBC GIF Russia Equity fund, says a 20% rise in earnings among Russian integrated oil producers would be positive for the re-rating of the Russian market, of which energy companies comprise about 30%. He also sees deep value in the Russian energy sector versus oil companies in other ma...