The Santos Ltd (ASX: STO) share price has continued its positive run and is pushing higher on Wednesday.
In morning trade, the energy producer's shares are up 3% to $7.47.
This means the Santos share price is now up over 20% in the space of a month.
Why is the Santos share price up 20% in a month?
As well as getting a boost from a positive reaction to its merger plans with Oil Search Ltd (ASX: OSH), investors have been bidding the Santos share price higher in recent weeks after oil prices surged.
In fact, oil prices continue to rise and hit multi-year highs overnight.
According to CNBC, on Tuesday night the Brent crude oil price settled 1.6% higher at US$82.56 per barrel and the West Texas Intermediate (WTI) oil price settled 1.7% higher at US$78.93 per barrel. The latter was its highest level since 2014.
The catalyst for this was OPEC's meeting this week. At the meeting, the oil cartel resisted calls to increase supply quicker and stuck to its gradual production increase plans. OPEC is reportedly concerned that a fourth global wave of COVID-19 infections could hit the demand recovery.
Is it too late to buy shares?
The good news is that one leading broker believes there's still a lot of value left in the Santos share price.
According to a recent note out of Morgans, the broker has an add rating and $8.55 price target on the company's shares.
Based on the current Santos share price, this implies potential upside of 14.5% over the next 12 months.
Morgans commented: "We expect the resilience of STO's growth profile and diversified earnings base see it best placed to outperform against a backdrop of a continuing broader sector recovery. STO remains our top preference amongst our large-cap energy universe. With early indications supportive of our view that material synergies and enhanced growth plans will result from the OSH merger. While in good shape, we expect STO to continue gaining investor support as it executes on the opportunistic OSH merger."
