Stu Morrow, chief investment strategist for Morgan Stanley Wealth Management Canada, published a two-part report on domestic oil and gas stocks. The focus was the sector’s participation in net zero emissions commitments and also featured important data about the future of global oil consumption,
“The Canadian Energy sector is currently trading at the steepest discount to long-term average valuations relative to any other sector in the S&P/TSX Composite Index.
Morgan Stanley oil and gas analyst Devin McDermott has an overweight/attractive rating on Cenovus Energy.“Canada’s population surged by almost 1.2 million people in the year through July 1st, by far the largest absolute increase on record. In percentage terms, the 3.0-per-cent year-over-year gain matches the largest yearly increase since the 1950s post-war boom.
“In the three decades that we’ve looked at this sector, any time Saudi is not challenged for market share it will defend price. This is the principal that lies behind our l/term, $80 Brent assumption which remains the base case for our current sector view. But the consequence of artificial price support is that backwardation [downward sloping futures price curve) is embedded as a permanent characteristic of the futures curve.