- On Wednesday, Kyiv blocked about a quarter of Russia’s oil flow to Europe, saying that interference from the occupying Russian forces was the cause
- This comes on a backdrop of the EU considering a total ban on all Russian oil
- After the news from Kyiv broke, these stocks spiked sharply
The TSX Composite Index confirmed a correction Wednesday, May 11, having fallen 10.7 per cent from its all-time high of 22,213.07 points. However, the energy sector rose 1.5 per cent by market close.
On Wednesday, Kyiv blocked about a quarter of Russia’s oil flow to Europe, saying that interference from the occupying Russian forces was the cause. Reportedly, this is the first instance since the invasion where Russian exports via Ukraine have been hampered.
This comes on a backdrop of the EU considering a total ban on all Russian oil. So, let’s look at some oil and gas stocks that gained and may continue to gain should the ban go through.
Pieridae Energy Limited (TSX:PEA)
The company is an LNG producer that sells to Europe. On Wednesday, its stock’s price spiked almost in double digits as it gained 9.9 per cent to close at C$1.11, its 52-week high.
It has gained a whopping 258 per cent year-to-date (YTD) and is up 327 per cent from its 52-week low of C$0.26 which came on August 20, 2021.
Southern Energy Corp (TSXV:SOU)
Southern’s resources are in Southeast US states and its stock closed at C$1.08 Wednesday having spiked 9.1 per cent during the day’s trade.
SOU is up 260 per cent this year and is currently trading 350 per cent higher than its one-year low of C$0.24 seen on December 14.
The stock’s price-to-earnings (P/E) ratio is 4.7, which denotes how many dollars needs to be invested to net one dollar of profit.
Petro-Victory Energy Corp (TSXV:VRY)
Petro-Victory’s resources are in Brazil and its VRY stock closed at C$5.80 on Wednesday, ending the day 8.4 per cent in the green.
Its return for 2022, so far, is 167 per cent. VRY currently trades 219 per cent higher than its 12-month low of C$1.82.
On April 27, the stock peaked to C$7.97 at which point it was possibly overvalued. It P/E ratio is rather high, 393.2.
STEP Energy Services Ltd (TSX:STEP)
STEP’s gain on Wednesday was six per cent and it closed at C$4.04. The stock is up 151 per cent YTD and 185 per cent year-over-year.
Its 52-week low of C$1.32 came on August 26, 2021. It is now 206 per cent better. Earlier this month, on May 5, it touched C$4.60 and is now 12 per cent lower.
Spartan Delta Corp (TSX:SDE)
The Alberta gas explorer and producer saw its stock close Wednesday at C$12.36, up 4.75 per cent.
It has gained 107 per cent this year and 158 per cent over the last year. On August 19, 2021, it touched C$3.92, a one-year low. The stock has spiked 215 per cent from that price.
SDE has the best P/E ratio of these stocks, four, comparable to SOU’s 4.7 but better.
As visible in the graphic above, these stocks have soared many times higher than their 52-week lows and have all more than doubled this year. Furthermore, after the news from Kyiv broke about Russia’s gas flow to Europe being hit, these stocks spiked.
A complete EU ban on Russian oil would likely disrupt trade flows and push demand up further. In lieu of this, these Canadian stocks make for an interesting watch.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.