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Oil rebound? The 'compelling' case to jump back in

Oversupply and weak demand continue to grip volatile oil markets but several analysts have found a pocket of relative safety which could potentially offer returns of 35 percent over the next twelve months.

Rather than fretting about whether the oil price has yet to find a bottom, several investment banks have started turning bullish on certain oil majors. These producers have suffered with a 70 percent plunge in the price of the commodity since mid-June 2014. But, many majors have been busy slashing costs and it appears France's Total has come out on top.

"We think Total is less at risk than most of the rest of the sector," Jason Gammel, an equities analyst at Jefferies, told CNBC Wednesday.

"(Patrick) Pouyanne (CEO of Total) has done a very good job in managing the company. Right now what we're focused on is strong balance sheets that can make it another 18 months without having to make extremely difficult decisions like cutting the dividend."

Shares of the French major are down 6 percent this year amid the wider sell-off in equities. But last year it lost just 3 percent when its peers, like London-listed BP, fell nearly 14 percent. Its price-to-earnings ratio - an important metric used by analysts to gauge a company's valuation - is at 14.07, suggesting it offers more value than rivals such as Shell, BP and Eni.

Gammel recently upgraded Total with a "buy" rating from "hold" and said his most preferred stocks also included Chevron, BG and Shell. On Monday, analysts at brokerage Bernstein Research, led by Oswald Clint, called Total a "stock for all seasons" and upgraded it to "outperform" from "market-perform."

"Current valuations represent a compelling entry point to invest once again in this major," the analysts said in a note. They added that the stock was 5 percent below their own valuation metrics, after being 30 percent above that same barometer at this stage last year.

Offshore drilling platform
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"With our price target rising to 51 euros, we see 35 percent upside over the next 12 months pre-dividend yield," the firm added.

The major has found growth opportunities in its exploration and production sector, according to Bernstein, who said that it has limited exposure to U.S. production which is facing a wave of bankruptcies due to the low price. The brokerage also added it had good exposure to the natural gas sector and was profitable with its refining operations.

Total has 16 "buy" ratings from the group of analysts that follow it, seven "strong buy" ratings and just one "sell" rating. The Swiss private bank Sarasin confirmed it was the "fittest of its peers" in a note last week following its earnings report.

And there might be more good news for oil majors like Total with commodity analysts speaking of a bounceback for the price during the latter part of this year. Brent crude futures currently sit at around $33 a barrel but have fluctuated wildly with talk of an output freeze by Russia and Saudi Arabia.

Regardless of any accord, Marina Petroleka, head of energy & infrastructure research at BMI Research, told CNBC that Brent could edge up to $40 a barrel in the second half of 2016 "as production starts seeing curtailments."

Meanwhile, Michele Della Vigna, the head of European energy research at Goldman Sachs, told CNBC Wednesday that it could push slightly higher to $50 a barrel.