[larry81]

Thanks @james4beach, i am truly blessed (and lucky). Even if i am up 150%, I still think there is much more gains to be made in the energy sector...

BoA just annonced their 120$/bbl prediction by summer 2022...

Bank Of America Sees $120 Oil By June 2022 | OilPrice.com

According to Bank of America, oil prices will hit $120 by June next year due to the current global energy crisis

oilprice.com

I am already having nightmares about the capgain tax bill !

 

[hboy54]

Congrats @larry81 and everyone else who was brave enough to go long energy! The thought crossed my mind, but it just kept going lower and lower and lower.

Investors seem to want to optimize a curious variable, the transaction win loss ratio. Learn to let that one go and optimize CAGR. My ACB in most of my energy (ie everything but Suncor) is hundreds of percent higher than last years lows, so I have many losing transactions, perhaps even majority still. But 20 year CAGR and dollars gained is quite sweet.

 

[larry81]

https://www.cbc.ca/news/canada/calgary/calgary-canadian-natural-q3-profit-1.6236748

 

[doctrine]

New 52 week high for Suncor and the XEG Energy Index. Onwards and upwards. Consuming countries are panicking in November at the seasonal low of demand with the largest ever release of strategic reserves. What is it going to look like in April-May when seasonal demand peaks? Yikes.

 

[james4beach]

New 52 week high for Suncor and the XEG Energy Index. Onwards and upwards. Consuming countries are panicking in November at the seasonal low of demand with the largest ever release of strategic reserves. What is it going to look like in April-May when seasonal demand peaks? Yikes.

Amazing! Now the question is whether this can get back to its previous levels from a few years ago.

 

[larry81]

weeeeeeeeeeeeee the party is still going strongggg. Will XEG reach another ATH before year end ?

 

[doctrine]

weeeeeeeeeeeeee the party is still going strongggg. Will XEG reach another ATH before year end ?

Took until the 1st week of January. XEG at 52 week high yesterday and today. CNQ and SU both hit new 52 week highs today too. Supply is looking weak, OPEC is showing signs of production constraints already - you didn't think it was just western oil companies suffering from a lack of capital, did you? And there has been no magic growth in capital investment in response to higher prices; no investor wants it, and neither do governments, so you get what you ask for. Riots like you see in Kazakhstan are going to become common over energy prices, unfortunately. If you doubled capital investment today, it would still take years to fix the problem. And we haven't even started fixing it yet.

 

[AltaRed]

While I agree a number of OPEC countries are already faltering in their ability to fill their shares of the monthly 400kpd production increases, others have more ability to do so such as SA, Russia, Iraq, Libya et al. Never mind that US production is increasing again (almost 1 million barrels per day over the past year) and Exxon is making great strides to get to 1 million barrels per day or more in Guyana (albeit a 5 year program to get there). I see US production adding potentially another 500-1000 kpd of production by the end of 2022 if prices remain in the $60-80 range. Supply is not as constrained as you make it out to be but I agree there will be limitations depending on how demand increases play out.

With some short term aberrations, I see the supply/demand balance remaining reasonably close, close enough to likely keep prices in the $60-80 range over the course of 2022 and beyond. We will see some continued growth in XEG prices and for select O&G companies, but I don't see XEG ever returning to its ~$20 peak back in 2014. XEG in the $15 range may be the best it can do over the next few years.

 

[doctrine]

Your assessment is pretty good I think, although I see it as more of a best case scenario. Especially with most inventories below average, there are plenty of risk to supply disruption. It is just so unusual for oil and energy stocks to be this high in January. The market is sending a message that supplies are tight - oil remains in pretty strong backwardation, inventories continue to deplete. But meanwhile, happy to harvest 20%+ free cash flow yields while what I view as inevitable plays out. If the world does pull out of COVID with Omicron this year, then really watch out.

CNQ at an all time high today. What a stock. Still can hardly believe I got shares at $11. Suncor looking really good too, lots of upside potential if they get Fort Hills running to capacity, and once they integrate Syncrude. I still see $50 this year. It would bring XEG to $15 or more.

 

[zinfit]

While I agree a number of OPEC countries are already faltering in their ability to fill their shares of the monthly 400kpd production increases, others have more ability to do so such as SA, Russia, Iraq, Libya et al. Never mind that US production is increasing again (almost 1 million barrels per day over the past year) and Exxon is making great strides to get to 1 million barrels per day or more in Guyana (albeit a 5 year program to get there). I see US production adding potentially another 500-1000 kpd of production by the end of 2022 if prices remain in the $60-80 range. Supply is not as constrained as you make it out to be but I agree there will be limitations depending on how demand increases play out.

With some short term aberrations, I see the supply/demand balance remaining reasonably close, close enough to likely keep prices in the $60-80 range over the course of 2022 and beyond. We will see some continued growth in XEG prices and for select O&G companies, but I don't see XEG ever returning to its ~$20 peak back in 2014. XEG in the $15 range may be the best it can do over the next few years.

Agree. Once we are past Omnicron I see a big surge in demand especially in the travel industry. People want to break the covid chain and get back to travelling and reconnecting.

 

[MrBlackhill]

Still can hardly believe I got shares at $11.

Nice job. 20% yield on cost and 5X gains.

And I still can't believe that I sold the NVA.TO shares that I bought at $0.80 because I got impatient as it was not moving. Now trading at $7, ouch.

 

[zinfit]

Nice job. 20% yield on cost and 5X gains.

And I still can't believe that I sold the NVA.TO shares that I bought at $0.80 because I got impatient as it was not moving. Now trading at $7, ouch.

I just see a lot of great opportunities in this sector. I have a number of USA plays as well. I have SU, Enerplus, Baytex, Cenovus, Diamondback, Arch , Whitecap and Conoco-Phillips . If we run into a inflationary cycle this sector will do very well. I believe for an intregrated I think Cenovus has the best upside . SU on a metric basis is selling at a higher price .

 

[Money172375]

i bought suncor when COVID first hit. Avg cost is $27. It represents about 4% of my portfolio. I plan to exit all oil/nat gas etc within a few years. I don’t follow the sector and I’m still a little confused as to which specific sub-sector/firms may get hit hardest when electrification takes off. Su? Enb? Emera? TRP?

anyway, the sun or trade was just that….a trade. Wondering where folks think this may go.

what do I need to look at to determine an exit point. All my other holdings will be held 25+ years.

 

[doctrine]

I believe oil is heading to all time highs, although probably not this year, but $100 is certainly possible. Oil stocks are priced like oil is heading for $60. I have plenty of oil stock positions and no real intention to sell anytime soon. Call me when capital investment hits 2019 levels - we're about $150 billion a year away.

There is a lot of catchup buying in this sector. #1 in 2021 and already #1 so far (early) in 2022. Quantitative and momentum buying will be real. As will most institutions who jettisoned these stocks. And with companies buying back stock, there is less supply available - this isn't EV or crypto where billions are being raised and plenty of paper supply abounds. There is less stock and less debt to buy in a sector that is outperforming.

 

[zinfit]

Just about any o and gas stock has had an outstanding run. I bought some Suncor to fill out a basket of 8 energy stocks. I have three US oil stocks. If oil is going up as some suggestion having a strong position in a stock with deep position in the Perminian basis is a no brainer.

 

[james4beach]

I still don't feel great about picking & choosing oil and gas stocks, but I do have a sizeable position in the TSX 60 and that's how I get my energy stocks.

In hindsight I do wish I had bought something like ATH, which had been on my radar early in the pandemic, but that's the nature of hindsight for you. But I am very glad that I have stuck with my Canadian index position over all these years.

If oil & gas continues to be strong, as Canadians we benefit in many ways. This will keep the CAD strong, protect us a bit from inflationary pressures, plus of course the general economic benefit and prosperity in Canada. Including prosperity to us dumb old index holders!

 

[newfoundlander61]

I originally purchased my full position of SU in Feb 2019 @$44.07. I held it through the market downturn and still hold it. Overall compared to where it was at one point it has come back nicely and to date I have received $2,732.10 in dividends and I plan on holding it for now. Who knows it may at some point go back to what I paid for it or even slighty higher. Other than QSR these are the only two of my 14 holdings that are down.

 

[hboy54]

A few months back one of my energy became my first 7 figure holding. Another one just became my first 7 figure accrued capital gain. There is every chance this year that a daily portfolio gain will be larger than my portfolio value circa March 2020. I violated all the rules of diversified investing, but sometimes an opportunity is so obvious you just have to go for it.

 

[londoncalling]

Well done @hboy. IMO you are the king of deep value. I have read and watched other threads where you have done similar especially in the commodities sector. Your conviction and patience is remarkable. Back to energy stocks. I was eyeballing oil and gas late 2018 early 2019, even though I pledged an oath to only play this sector through the likes of pipelines having learned by riding the likes of eagle energy, longview, renegade, surge energy and crescent point a decade ago. In the spring of 2020 I was looking at SU, CVX, XOM, CVE and CNQ as they may offer a little more protection than the juniors. At that time I was leaning heavily towards CVX to increase US allocation and a possible transition to converting their fuel stations to recharge stations. When the pandemic hit in 2020 I turned my attention to other opportunities and increased my positions in financials. I feel that CVX has lagged the rest of the oil and gas stocks but haven't looked closely at it in about a year. There is definitely bullishness on oil and commodities in general. I was late to the party last time but came out relatively unscathed (aside from CPG and SGY). It's rarely a good idea to stay late at the party. O&G may be a major player in 2022 as more money and attention come to the sector. Will the current pullback be limited to tech or will we see a market wide correction?

 

[MrBlackhill]

A few months back one of my energy became my first 7 figure holding. Another one just became my first 7 figure accrued capital gain. There is every chance this year that a daily portfolio gain will be larger than my portfolio value circa March 2020. I violated all the rules of diversified investing, but sometimes an opportunity is so obvious you just have to go for it.

Good job!

I've myself lost an opportunity to 10X my money in less than 2 years. I bought a stock and then changed my mind rapidly after. That stock then started a 10X run a few months later.

Anyways, at least I've had a few 2X, 3X, 4X and 5X.