UBS analysts have singled out energy conglomerate Santos as their top choice within the Australian energy sector.

The financial services institution has raised its price target on Santos to A$8.95/share from A$8.80/share.

Additionally, UBS has increased its price target on Woodside to A$35.40/share from the previous A$35/share.

The potential restart of drilling activities at Santos' Barossa project by the end of 2023 could assuage potential downward pressure on the stock.

The brokerage has also elevated its average Brent oil price predictions for the fourth quarter of 2023 and for the entirety of 2024, setting them at $92/barrel and $87/barrel, respectively, in light of an anticipated supply crunch.

UBS continues to forecast robust demand from China in the final three months of the year and upholds a conservative outlook for oil demand in 2024.

UBS points out that among the energy companies, Woodside has the highest degree of leverage to changes in the price of oil.

Santos is a leading oil and gas exploration and production company, with high-quality assets and projects predominantly located throughout Australia and the Asia-Pacific region.