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We expect the price of Brent oil to remain robust at an average of US$100/bbl for 2012, down 10% YoY, but still 22% higher than the three-year average (2009-2011). Our forecast for 2012 is 8% lower than the Bloomberg consensus as we are less optimistic about global economic growth this year. We see more upside risks than downside risks to our conservative oil price forecast from increasing tension with Iran, continued political unrest in the Middle East, and higher than expected global economic growth. Among the Thai upstream, we expect PTT Exploration and Production (PTTE.BK/PTTEP TB)* to benefit most from the oil price increase and reiterate our Outperform rating on the counter with a target price of Bt200.00. We may revise our conservative oil price forecast upward if the tension in the Gulf is prolonged. Based on our sensitivity analysis, every US$5/bbl increase in the price of Brent oil would increase PTTEP’s FY12F EPS by 6.0%. If we used the Bloomberg consensus 2012 average Brent oil price of US$108/bbl, our PE based target price for PTTEP would have increased to Bt220.00.