Faroe Petroleum Plc Share News (FPM)

Westhouse Securities has called for investors in the oil and gas sector to be a "bit more patient" with oil prices currently rumbling along at multi-year lows, as it highlighted buying opportunities in the sector.Brent crude has now fallen over 25% to $79 a barrel since hitting a high of $115 a barrel in June on the back of falling demand and rising supply.The broker said that despite the downwards pressure on prices in the near term, there shouldn't be a collapse. "We are in a situation where the oil-price fall needs to be countered by supply changes," it said.The comments came ahead of the pivotal OPEC meeting on 27 November as the market continues to speculate about whether the organisation will decide to address what some observers believe is a supply glut."We do not try to predict OPEC decisions, but we maintain our view that oil is a high-cost commodity, one that cannot trade at low prices for prolonged periods of time," said analyst Jamal Orazbayeva and Mark Henderson."We argue that while there is near-term pressure on the oil price, a lower oil price environment will result in some correction on the supply side and if it does not come from OPEC this time, it will from outside OPEC (we think the US is the most likely)."While hard to predict the exact bottom level of oil and the timing of reversals, the analysts believe that some stocks have already "bottomed out" despite crude prices continuing to fall."We argue that for investors with a bit more patience and perhaps a more contrarian strategy, there is now an opportunity to cherry-pick stocks at large discounts."With some equities having been "oversold", Westhouse said that many stocks will be able to weather the short-term pressure on oil and also have near-term catalysts coming up.These are Ithaca Energy, Genel Energy, Enquest and Circle Oil - all of which are rated 'buy'.Bowleven, Faroe Petroleum and Parkmead are also rated 'buy'. These, the broker believes, are sitting on a material discounted discovered resource base which has a high chance of success.