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With economies rebounding from the pits of last year’s pandemic lows, oil prices could surge to US$ 100 per barrel by 2022.
The Bank of America Corp (BofA) said in a report on Sunday, June 20, that as businesses return to normal operations, global oil consumption is likely to expand by next year. The International Energy Agency (IEA) also pointed earlier in June that the demand for oil around the world could reach 100 million barrels per day next year.
Amid stiffer supply and demand balances, oil prices could briefly touch US$ 100 per barrel, said the BofA Global Research report.
If crude oil touches a triple-digit figure, it would be the first time since 2014, when the market witnessed a slump due to the North American shale oil.
With that in mind, let's look at three Canadian energy stocks you can explore ahead of such a price surge.
Enbridge Inc (TSX:ENB)
Enbridge’s share price surged by six per cent in the past month. The oil stock clocked a 52-week high of C$ 50.19 on June 17, 2021. Since then, ENB scrip has dwindled slightly, closing at C$ 49.47 per share on Monday.
1-year chart of stock performance, volume and moving average multiple of Enbridge Inc. (Source: Refinitiv)
The oil and natural gas producer holds a 10.8 per cent return on equity (ROE) and a debt-to-equity ratio of 1.2, as per TMX.
One of the top dividend-payers in Canada, it has a quarterly dividend of C$ 0.835 per share and currently posts a dividend yield of 6.8 per cent.
ENB shares have returned 21.5 per cent this year and about eight per cent quarter-to-date (QTD). On the financial front, Enbridge posted robust first-quarter 2021 results with GAAP earnings of C$ 1.9 billion, as against a GAAP loss of C$ 1.4 billion in Q1 2020.
Cenovus Energy Inc. (TSX:CVE)
Cenovus, presently holding a market cap of C$ 24.99 billion, is making strong progress after completing the acquisition of Husky Energy Inc. on January 1 this year. In the first quarter of 2021, Cenovus produced approximately 770,000 barrels of oil equivalent per day (boe/d).
The oil and gas producer generated C$ 1.1 billion in adjusted funds flow and C$ 228 million in cash from operating activities in Q1. Cenovus is part of the alliance of energy companies that aims to achieve net-zero greenhouse gas emissions.
1-year chart of stock performance, volume and moving average multiple of Cenovus (Source: Refinitiv)
CVE stock catapulted by 60 per cent year-to-date (YTD) and grew 100 per cent in the past year. It was priced at C$ 12.39 on Monday, marginally down from its 52-week high of C$ 12.86 (June 15).
Canadian Natural Resources Limited (TSX:CNQ)
Canadian Natural Resources stock jumped five per cent to close at C$ 44.89 apiece on Monday. It surged as much as 21 per cent in the last three months and about 47 per cent YTD.
The energy sector in Canada is on a road to recovery, with the S&P/TSX Energy Index up 55 per cent YTD. As one of the largest energy companies in the country, Canadian Natural Resources is also expected to perform well in the remaining quarters of the year.
1-year chart of stock performance, volume and moving average multiple of Canadian Natural Resources (Source: Refinitiv)
Against a net loss of C$ 1.3 billion in the first quarter of 2020, CNQ recorded net earnings of C$ 1.4 billion in Q1 2021. The energy company holds a price-to-book (P/B) ratio of 1.6 and offers a 3.02 per cent return on assets, as per TMX data.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view. The reference data in this article has been partly sourced from Refinitiv.
