3-2-1 crack spread a whopping $52.70 CDN On Dec.1st 2021, the spread was at $10,90. Fast forward 6 months
and we got an insane run up to $$76.75 on June 3rd 2022
Naturally, this was unsustainable.
Still, the margins spreads have stayed elevated since.
Q2 results are going to be down on a comparitive basis because WTI and insane spreads are lower but they are still very healthy.Even Q/ could be lower than last year.but like i said, last year price were crazy high.Can they go back to these levels, absolutly.
There seems to be an OPEC+ put at $70 and any major disuption(huge hurricane in the gulf,
terrorist attack..) could sent Brent and WTI to $90 to $100+.
Some may argue that a recession,EV or... could take the price down.I am not in that camp.
That's the beauty of investing,for each buyer, there's a seller thinking the opposite.
Yes Suncor as under performed it's peers but that is exactly why i feel it's at a great entry point.
I calculated that the layoff announcement will equat to about 20 cents / share(pre tax) of annual
saving.
SU had budgeted AECO gas at $5, it's been in the $3 or below since April.This winter or a bit before it will probably go higher but for now on a yearly basis that's another 30 cents/ share of
added profit.
The CDN tire deal will add 17% to their downstream output, this is not a negligible amount.
Refining is not dead, we will need refining products for decades to come.
I see my SU position a a great defensive position going forward with a high probability of
a revert to the mean VS it's peers.
And Yes, CNQ as proved us that as a management team, they are one the best but it is also
reflected in it's share price and will always trade at higher multiples
Rich Kruger also has a good reputation.Will he be able to stear SU to a better place.
I am betting on it.
My weekend task, is to convince my wife to buy some SU on monday.
Nice weekend to all