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Suncor Energy Inc T.SU

Alternate Symbol(s):  SU

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.


TSX:SU - Post by User

Comment by Experiencedon Jul 01, 2023 5:14pm
144 Views
Post# 35523837

RE:Bullish Oil Fundamentals, and what could Derail it

RE:Bullish Oil Fundamentals, and what could Derail it Thanks for that Migraine.  useful perspective to say the least.

While there is a lot to say about the underpinnings of their scenario, for the sake of argument, let's say they are right about oil going to 90 a barrel by yearend.

If that were to happen then we would see a resurgence of inflation driven by the higher oil prices and another round of interest rate hikes.  In the case of the US this would drive my base case assumption of 5.5-6% for the discount rate that I talked about many months ago well into the 6s and possibly as high as 7%.  Such an event would guarantee a recession. A recession would in turn create a downdraft in oil prices.

Since you are highly levered in your investment strategy such a scenario would likely result in another year of 7 digit gains for you.  For mere mortals, many oil investors could lose their shirts.
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