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I haven't had a chance to look into the Louisiana closure but if it means LNG is stranded domestically will that equate to higher prices for LNG outside NA and lower prices here at home? If that is the case it may do more to curb inflation than the hikes from central bankers. :p Demand destruction is a dangerous pursuit which will result in more inflation in the near term and a surprise halt to the overall economy once it arrives. I would prefer to see an increase in supply but that will take a lot of time as well. In the meantime I am holding onto energy. I'd like to add but I expect the drop to be sudden when it does come and the lower my ACB the better as I hold in registered accounts. For now I will take it week by week and quarter by quarter. Once people realize ESG is a marketing hoax (I am all for ESG but not many of the funds practice what they preach) perhaps the big funds will start flogging oil again. BTW Canadian oil is in a much better situation from an ESG perspective than most believe.
 

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I reread my post and can see that I was not very clear in my statement regarding demand destruction. I agree that it is unlikely the export disruption will not lead to demand destruction. Oil and NG are not one in the same. For additional clarity missing in my previous post: There are a number of those that believe escalating fuel prices will result in people being more selective on travel frequency and options. Or just not buy fuel at all and opt for other modes of transportation. This would hypothetically kill demand. I am not in that camp. As mentioned by doctrine and others China hasn't lifted lockdowns and a lot of workplaces have yet to fully return to work. Apparently, a lot of work spaces were given up and now the game of musical chairs has begun. As far as personal discretionary travel is concerned, I believe at least over the summer and perhaps this winter people will forego other discretionary spending in order to travel. Of course this does not apply to those that are already stretched thin due to low income. They may be forced to cut spending in all areas as a result of high inflation. Energy supply (all sources) in Europe will be a mess for years to come but in particular Nat gas. In hindsight it is easy to see how we got into this mess but solutions don't seem to be immediate. As a result I feel this bull has more room.
 

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This is insane. Biden telling companies to increase production while indicating he is going to tax them further. Barriers to production need to be removed not increased. Some of these companies did a great job while maintaining investment in production when oil was essentially worthless. Crazy days indeed. Recent events show how easily our economic systems can be disrupted. Everyone is talking about increasing supply but if the oil price drops too quickly it is possible that OPEC will cut supply. We often forget that OPEC has political and economic levers they can pull to move the price of oil up or down.
 

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I don't foresee rationing occurring unless supply dries up completely. I think price controls are a bad idea as well. Putting in price controls without reducing fuel tax will be political suicide. I believe that market forces will act as necessary in most cases. Those that want to consume should be willing to do so at market rate. There are some(not sure how many but I do sympathize) that live in the range that necessary consumption will severely affect their cost of living. There are already people that have to choose how to pay for life's necessities on a regular basis. Anyone participating on this forum is not likely part of that demographic. A lot have gotten used to having enough discretionary income that they have a lot more allocated to wants than to needs. A healthy dose of perspective readjustment may not be a bad thing. Yes it sucks but decisions have consequences. Sometimes they work in your favour and sometimes they don't It's time for those that were not spending with reckless abandon to know their efforts were not in vain. I do not want to see cheques cut by the government to the citizens. I would prefer that real longer term solutions are found to economic problems. Sometimes stimulus is needed(definitely less than has been recently practiced) but you can't spend your way out of every problem. If your only tool is a hammer then every problem looks like a nail.
 

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well you have to have a lot more sellers than buyers to see the declines we have seen. I suspect it is a lot of retail investors who are cashing out. For many fundamentals isn't their strong suit . I expect many of the energy stocks will be buying another 10 or 15% of their stock with this price decline and come the next quarter upping their dividends and may-be paying some special dividends. They have to be sitting on a big pile of cash.
A lot that got in 2020 are more than happy to cash out here based on the overall panic you mention. If we see another 10% down in energy and WTI stays at or near current prices I will be adding to my existing positions. CNQ got clobbered today but that's to be expected with the run the oil stocks have had as of late.
 

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That makes more sense as to what he meant by balance. Thank you. As you stated we won't see the effects for quite sometime but at least there is capital being spent to address tight supply. I have always found it interesting that commodity companies often start these projects at or near peak prices and by the time they come online we are in a different part of the cycle. At least that has been my personal experience with the mining sector over the years.
 

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Even at $80 most Canadian oil cos are throwing off decent FCF. They have no plans to allocate that cash to capital investment as of yet and they won't sit on it. That means share buybacks and dividends for those that are debt free. Those that have debt will pay it down. I agree the share price drop is not congruent with the shift in oil pricing or the sector's current state. Purely profit taking and fear of recession. Oil demand is still increasing and in my view would not get killed as there is more non discretionary driving taking place (transportation of goods, work, etc.) than oncoming supply. We could see actually shortages which would cause even more chaos at the pumps. Current fuel prices are high and don't seem to be coming down at the same pace as the recent pullback in share price. The conflict in the Ukraine does not seem to be ending soon. from a discretionary standpoint, airlines have more demand for travel than they do staff to increase the number of flights. People are sick of sitting at home. They will sacrifice in other areas (retail for example) to get out and explore. I know nobody can predict what happens next but what catalysts would push oil prices back to $70? Perhaps regulatory interference?
 

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Long term sentiment is gone and many are expecting EVs to kill oil. Eventually autos will no longer run on ICE. However there is more to energy than oil and there are more uses for oil than fuel. How long it takes to transition from oil as fuel and ween ourselves from plastics may take awhile. I think there will be opportunities to take advantage of this sentiment from both sides. Some think this is oil's last bull run. But I remember hearing that the last time as well. Like you say only time will tell.
 

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Canada fails at developing their resources domestically. Perhaps the tradition of extracting and shipping resources was deeply imbedded in our national psyche since colonization and we just can't shake it. I understand that it is cheaper to export and import if existing plants are in place . However, would it not be a better longer term investment to build infrastructure creating initial and sustainable employment, reducing costs to Canadians and gaining better control of supply and demand? I thought supply chain disruption would spark interest in development at home. I get that we cannot compete with Mexico and other developing nations on cheaper labour. But we should be close on competing with the US who doesn't seem to have any issues getting whatever projects they want up and going. Is it too late for Canada as companies are already established in the US? Is a 1% difference in corporate tax rate that big a difference?

Corporate Tax Rates by Country 2022 (worldpopulationreview.com)

It is sad that some consider inclusion into Buy America policy ( small USMCA wins, US EV manufacturing plans) a major victory when we have the capacity to do a lot of it ourselves. US is building out NG facilities while pipelines continue to face red tape, rerouting and stoppages on both sides of the border. Doesn't that just trap Canadian energy exports finding other markets while the US controls the major NA ports for refined energy?
 
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