(ShareCast News) - RBC Capital Markets upgraded Royal Dutch Shell to 'outperform' from 'sector perform', keeping the price target at 2,500p.The bank said the recent OPEC and non-OPEC supply deals have put the oil market on a much firmer footing, removing some of its tail-risk concerns for the oil giant."Looking ahead, we see the potential for strongly improving cash flow generation, while in the near term, we believe net debt should begin falling from its peak."RBC said its previous concerns about Shell were about a more prolonged period of lower oil and gas pricing, which could mean an extremely tough divestment market alongside weaker organic cash flows."The recent OPEC/non-OPEC supply deals have effectively provided an environment where we believe this is unlikely, while we are also seeing signs of improving macro conditions for European gas, where Shell has the second highest exposure in the peer group."In addition, RBC argued that Shell is past the point of peak net debt and its balance sheet will improve going forward, giving the potential for the dividend yield to contract."Shell recently noted the company is working on 16 different asset disposals, all of which have a value greater than $500m. On our numbers, we expect $2.7bn divestments to be cashed in next quarter, which should help Shell de-leverage and start to reduce its $77bn net debt figure."RBC reckons Shell can outperform its peers if it can continue to deliver on the divestment programme.