Today on the show, we welcome Equity research analyst Thomas Goldthorpe. He discusses market trends and shares his perspectives on the Canadian energy landscape. Thomas reflects on the ups and downs of the oil market since the beginning of 2023. He says the energy sector underperformed in the first half of the year, which was on the back of weaker prices. In the summer, oil prices cooled off and energy stocks underperformed. But, he adds, with a rebound in oil prices from that period plus overall inflation sentiment, we’ll see stocks perform better. Thomas comments on the Canadian and American energy markets and what they are grappling with as of late. He notes the US had robust growth year-over-year, but it is set to decline plus inventory issues are popping up creating some issues. Thomas says the Canadian oil market side is fairing very well, with a healthy growth outlook and marginal acceleration with stronger prices. Thomas discussed how OPEC and the Saudi government are taking proactive steps instead of reactive ones in terms of oil cuts. For OPEC, cutting earlier in the cycle when projected weakness is coming instead of after weakness happens has been a significant move. The Saudi government is trying to be more commercial and try to reach the highest oil prices possible for its kingdom. Thomas notes we will see rolling demand for oil, yet OPEC cuts are at recessionary levels to help balance the market.
Recorded on September 21, 2023.
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