Well, we’ve had oil steady at around $34 a barrel for a week now! That’s nothing in the long-term world of investing, but for the big City institutions whose daily trading is influenced by the price of the stuff, it can presumably seem like a lifetime.

I can understand why much of the oil and gas sector has been hammered, with many upstream explorers (especially the smaller ones) carrying hefty debt funding and at serious risk if oil stays cheap for much longer.

But aren’t our two FTSE 100 oil giants looking a little oversold right now, and what does it mean for them if the hoped-for oil recovery really is in sight?

Modest fall

BP (LSE: BP) shares have actually only fallen by 32%, to 343p, since July 2014, when oil was up around $110 per barrel, and to regain that old height would need a 50% price rise. Of course, the chances of a return to an oil price as high as $110 any time soon seems extremely remote.

So very little chance of a doubling in the share price, then? Actually, current forecasts put BP shares on a P/E for this year of what looks like a stretching 26 (the FTSE average is only around half that right now). But this is a year when the company is only just expected to get back into profit, and prognostications for 2017 would drop that multiple down to 12 on a doubling of earnings per share (EPS).

That’s based on today’s pessimistic outlook for oil, too, with most of individual forecasts from before the recent uptick and before the increasing likehood of OPEC moves to trim some excess production. Should the oil price reach around $60 over the next 18 months, I could see BP’s 2018 EPS doubling again and dropping that P/E to just six.

And don’t forget there’s still an 8% dividend yield on the cards, with the company repeatedly saying it intends to uphold it.

Lower valuation

Looking at Royal Dutch Shell (LSE: RDSB) we see a slightly greater share price fall, of 37% to 1,606p, over a similar period — we’d need a 60% price rise to recover that old ground.

This time, although there’s a further EPS drop forecast for this year to put the shares on a P/E of 19, that would drop to only around 11.5 based on the EPS recovery forecast for 2017. Again, if we get a significant hike in the price of the black stuff by the end of 2017, I can see us going into 2018 with a further very handsome EPS rise in the soothsayers’ eyes.

Meanwhile, Shell shares are offering dividends of 8.3%. Shell has not been as openly committed to maintaining its dividend as BP and I think there is a more realistic chance of a cut, but if it happens the firm will be keen to keep it as late and as small as possible.

Double? Really?

Is there really a chance of these two providing 100% returns to those brave enough to invest now? If oil picks up to around the $60 mark and these dividends are maintained, I reckon there’s a pretty good chance of it.

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has recommended Royal Dutch Shell. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.