Canadian Oil Stocks: Why Are SU, IMO, CVE & CNQ Stocks Moving Today?
One of the defining market trends last week was energy independence. Specifically, the United States and Europe appear to be on a mission to become less dependent on Russian oil and gas exports amid the conflict with Ukraine. It hasn’t been easy for the United States, of course, but now Canada may be offering a solution. Today, Canadian oil stocks are on the rise after one of the country’s energy officials proposed an idea that could help strengthen both economies.
Sonya Savage is the Minister of Energy for the Canadian province of Alberta. This weekend, the official tweeted that she believed Alberta could provide exactly what the United States needed. This news sent Canadian oil inventories soaring as anticipation mounts.
How well are Canada’s oil producers faring after this news? Gains are varied, but many of the biggest names in the industry are in the green. Imperial Oil (NYSEAMERICAN:IMO) is relatively flat for the day while Canadian natural resources (NYSE: CNQ) increased by 1.1%. Cenovus Energy (NYSE:CVE) is also up 1.6%. Finally, today’s winner looks like Suncor Energy (NYSE:SU). The stock is up more than 4.5%.
What’s going on with Canadian oil stocks?
For the United States, this proposal appears to be an excellent opportunity. Since the start of the conflict in Ukraine, it has become increasingly clear that the United States and other economic superpowers are feeling the pressure to reduce their dependence on the Russian oil industry.
Of course, the US and UK have so far been reluctant to impose sanctions on Russian oil producers. It is not without reason. This would mean significant economic consequences for both nations. However, in the future, the United States will probably be tempted to explore the idea proposed by Savage.
Savage originally proposed that the United States look to Alberta for oil in a tweet. The official was responding to a call to action from You’re here (NASDAQ:TSLA) CEO Elon Musk.
Agreed. And it should come from Alberta, home to the 3rd largest oil reserves.
Alberta is the answer to America’s energy security. Real emission reductions, reliable, right next door. https://t.co/Vr1SZZXlum
— Sonya Savage (@sonyasavage) March 5, 2022
Savage’s short description pretty much sums up the benefits for the United States: “Real emissions reductions, reliable, right next door.” It reads like a sales pitch – and it just might be effective.
What this means
There is no doubt that an increased relationship between US and Canadian oil companies would be an exceptional catalyst for Canadian oil stocks. If President Joe Biden were to sanction Russian oil producers, it could have even more serious effects on the economy. However, a partnership with Canadian oil could certainly help ease the pain. The incentive has never been greater for the United States to strike a deal.
Thus, all investors should keep a close eye on Canadian oil stocks.
At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.