Suncor Energy Inc T.SU

Alternate Symbol(s): SU

Energy Oil & Gas Integrated

Suncor Energy Inc. is a Canada-based integrated energy company. The Company's segments include Oil Sands, Exploration and Production (E&P), and Refining and Marketing. Its operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the United States; and the Company’s Petro-Canada retail and wholesale distribution networks (including Canada’s Electric Highway, a coast-to-coast network of fast-charging electric vehicle (EV) stations). The Company is developing petroleum resources while advancing the transition to a lower-emissions future through investments in lower-emissions intensity power, renewable feedstock fuels and projects targeting emissions intensity. The Company also conducts energy trading activities focused primarily on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. It also wholly owns the Fort Hills Project, which is located in Alberta's Athabasca region.

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Suncor Energy Inc > OPEC+ Surprise Production Cut: 1.657 mm bpd

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Post by MigraineCallon Apr 02, 2023 3:42pm

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Post# 35374866

OPEC+ Surprise Production Cut: 1.657 mm bpd

Wow....

Even before tomorrow's OPEC+ meeting, they announce a big surprise voluntary cut, before trading resumes.

Seems the window to buy cheap calls of your favorite producers may have just slammed shut.

Since markets are open Monday, my Sunday night is always my Saturday night. As a result, I'm about 10 beers deep into my Saturday night, so I'll just repost some comments I see on Twitter about it before heading to bed:

Another possible reason for a cut is that their production capacity has fallen & they couldn't make their quota even if they tried. It's better to look aggressive rather than impotent.

Summary of the voluntary cuts so far:
RUS: 500,000
SAUDI ARABIA: 500,000
IRQ: 211,000
UAE: 144,000
KWT: 128,000
KZT: 78,000
Oman: 40,000
Algeria: 48,000
Gabon: 8,000

Why the surprise #crudeoil production cut now?
1) anger directed towards recent non-fund driven spec selling
2) concerned +2m b/d 2023 demand growth, backloaded into 2H, may not be reached with markets pricing in a US recession
3) stalling US shale growth posing no threat

OPEC cutting 1mmbbls/day - my mind is blown. These moves typically telegraphed. This one wasn’t. Caught traders flat footed and lowest net long levels in years. Biden administration going to love this - NOT. Great reminder to never be complacent.

Consider, though, that when OPEC spare capacity is low, it means the group will be more likely to cut production to preserve that precious spare cap. Therefore, a "surprise" cut is in line with the low spare capacity thesis.

An interesting point is those cuts are during a period when demand seasonally rises in the Middle East....

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