In a new report, Guggenheim analyst Michael LaMotte upgraded the oil services sector from Neutral to Buy based on the firm’s belief that oil prices are set for a sharp rebound in coming years.

Guggenheim is now calling for a return to $100/bbl oil by 2018, a move that would have broad market impacts extending far beyond the oil services sector.

Here’s a look at three reasons Guggenheim predicts such a sharp rise in oil prices.

1. Delays In Production Turnaround

LaMotte predicts that it will be more difficult than anticipated to re-stimulate production outside of the United States, Russia and OPEC nations following at least two years of plummeting E&P capex. “Specifically, we expect the net, managed decline rate for this 27.7 mmbd of production to decline -2.5 percent pa beginning next year,” LaMotte explained.

2. Wars In Syria And Iraq

LaMotte believes…

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