Barclays issued an industry note on oil, highlighting companies such as Royal Dutch Shell plc BP, as the firm believes that a recovery in oil price is likely. Analysts at Barclays reduced their 2016 Brent price assumption to $42.50/barrel from $60/barrel as volatility has recently increased. Analysts Joshua Stone and Lydia Rainforth wrote, "The challenging macro environment has also brought into sharper focus cost discipline...This combined with low valuations and what we expect to be a recovery in the oil price as non-OPEC supply falls and we leave an unusually warm winter behind towards driving season." Analysts at Barclays gave one key reason why they see strength in oil companies: Operational efficiency Barclays noted that as the price of oil has declined company management has had to address large budgets, poor capital allocation and operational inefficiencies in order to remain profitable. Thus, if and when oil prices improve, companies may be able to increase long-term profitability and drive shareholder value. Going forward, while Barclays cut their short-term oil forecast, they believe that there is a reasonable probability that oil may reach $60/barrel, with $85/barrel in the upside case. via Benzinga