future insightTight supplies will drive Canadian Oil sand producers to new highs; this is my prediction. How do I come to this hypothesis?
1. Well, the world’s largest consumer is suing the world’s largest producer; this should be good for an increase in demand for Canadian oil stocks when compared to Foreign owned oil companies (using P/E for comparisons between all oil majors, when the US says ok, no more OPEC we'll invest in our neighbor, look out, $$$$$). Like one guy put it: that’s like a crack head suing his crack dealer because the price of crack is to high and he doesn’t believe he should pay such high prices for his crack. Gotta love American enthusiasm, and God knows they love their crack.
I cant wait to hear what Iran and Venezuela says about that, what will Russia, India and China say?
2. Canadian oil sand reserves are proven and you don’t have to go wild-catting.
3. Our oil is cheap compared to higher API grades
4. Geo-politically stable, depending on what you consider stable
5. Infrastructure is backed buy government, never bet against government, what the people want government will give them, especially in big business. The Chinese built a heavy crude refining plant, getting ready for Canadian oil, and large-scale pipelines are being planned.
6. Competition between the super powers, either the US will buy our oil or the Chinese will, either way we benefit.
7. you don't hear the argument anymore that drilling unconventional oil is exspensive, it is, but not at $150 oil when it comes to oil sands, maybe off shore is still exspensive, how do you know for sure, core holes in the oil sands are cheap to drill, off shore Brazil is not, when it comes to seeing whats down there.
All this translates into higher premiums (multiples) paid buy investors for Canadian Oil sand plays. The commodity bubble is not a bubble it is a result of growth / supply and demand moving forward, whether its here or over there, our planet population is growing.
You cannot compare the tech bubble of 1999-2000 to this bubble; the fundamentals are not the same and cannot be compared on the same playing field.
The clock is ticking, place your bets.
But of coarse there is the other side of the story, the world is changing to meet environment issues and global demand issues in accordance to a supply crunch, but that won’t be met for years…Oil is a today trade. Green energy is a tomorrow trade; how far apart will the be? 2 years?? 3yrs?? I’ll take positions when the money managers signal the move towards that direction (follow the big money), until then, OIL