03:29 PM EDT, 09/13/2024 (MT Newswires) -- ConocoPhillips ( COP ) expects rising commodity price volatility and has structured its plans around ensuring operational stability, RBC Capital Markets said in a note emailed Friday.

RBC analysts noted that investors are focused on recent oil price declines and the Marathon Oil ( MRO ) acquisition, following management meetings with Kirk Johnson, Senior VP of Global Operations, and Phil Gresh and Miguel Curo from Investor Relations, the note said.

The company expects to close the Marathon Oil ( MRO ) acquisition by late Q4, driven by synergy and free cash flow benefits, RBC said. "Management feels confident in the $500 million runrate synergy target by 4Q25. There appears to be a good line-of-sight on achieving upside to synergy targets." it added.

"Oil prices could dip into the $60's [per barrel] for a couple of months, but likely move back to $70+ [per barrel]," RBC said, adding that US oil growth for 2024 is 300 million barrels per day, LNG demand is strong in Europe and Asia, natural gas prices might rise to $3 per thousand cubic feet to $4 per thousand cubic feet long-term, and hyper-scalers are eyeing natural gas for AI datacenters.

In Q2, ConocoPhillips ( COP ) slightly raised its budget to $11.5 billion due to increased non-operated activity and accelerated spending at the Willow project, RBC said, adding that "[ConocoPhillips ( COP )] does not overreact to price changes and operates a more stable business, which should create more value long-term. The plan is to stay-the-course but there is a lot of flexibility in the budget given the short-cycle dynamics in the Lower-48, if needed."

RBC has an outperform rating on ConocoPhillips ( COP ) with a price target of $140.

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