Tweet

Jeremy McCrea, CFA

Nov 18 • 6 tweets • 5 min read

Thread: Why has Oil & Gas been so volatile? Since 2018, the majority of all CDN E&P buying has come from high-turnover funds. Thus any WTI weakness had them rushing to the exits. Encouragingly, low-turnover funds have become the main buyer in 3Q

More energy inst. buying trends:

2/ As CDN Oil & Gas names hinted at bigger dividends & more growth post Q2 earnings, we saw these 'style' of funds be the dominant buyer in Q3. This theme likely continues as balance sheets allow for more ‘shareholder friendly’ items and growth into 2023 #WTI

3/ Importantly, some of the largest global funds are now picking up CDN Oil & Gas names. Given their AUM size, it can take multiple quarters to establish a position, suggesting there is more large block buying to come in future quarters #energy #CrudeOil #OOTT

4/ Since 2018, most buying of CDN Oil & Gas names have been from energy focused funds. Q2 was the time where the 'Generalist' investor finally came back and Q3 looks to repeat this trend again (and in size)! The sector remains 'investable' for the Generalist investor now #energy

5/ Energy security is a global theme and foreign investors continue to see CDN Oil & Gas names attractive, buying $3.5 bln in Q3. (offsetting selling from CDN fund managers). With the TSX Index 20% Energy, CDN investors likely still come back to the space #EnergyCrisis #alberta

@JeremyMcCreaCFA

6/ In total, we saw $3.3 bln in net buying of CDN E&Ps in Q3 (based on institutional 13F filings of more than 5,000 funds that have held a CDN Oil & Gas stock). Overall, the trend looks very favorable heading into 2023 #energy #investing

Follow @JeremyMcCreaCFA @RaymondJamesCDN

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @JeremyMcCreaCFA

Jeremy McCrea, CFA

@JeremyMcCreaCFA

Oct 26

Thread – The unemployment rate within CDN Oil & Gas continues to drop, now at 2.5% (w/ Alberta even lower at 1.8%). This budget season, even if mgmt teams wanted to spend more, finding technical staff is increasingly more difficult, likely capping any large capex plans #yyc #yeg

/2 There’s been quite the hiring spree over the last couple years, with jobs in the Exploration & Production group rising ~20% since Jan 2020. That said, levels have plateaued now, even while WTI oil and NYMEX natgas prices have increased, showing the difficulty in hiring #oott

/3 The issue is a declining E&P labour force, now down 6% from recent highs, (at 104k vs. 111k last June) and more meaningfully below 2016 levels. Finding qualified geologists / engineers is becoming increasingly challenging

Read 4 tweets

Jeremy McCrea, CFA

@JeremyMcCreaCFA

Oct 10

Could we see a NYMEX natural gas price spike this winter? The U.S. just might not be able to rely on 'cheap' Canada natgas imports w/ western CDN storage near record lows (at only 71% full).

A thread on CDN natural gas dynamics #AECO #oilandgas #LNG #alberta

A number of issues why CDN natgas storage is low, but we've already begun to see a reversal, with AECO difs improving dramatically over the last week (now at US$2.50/mcf). Last time storage was at current levels, the differential went on to reach $0.50/mcf a year later; 2/ #NYMEX

Despite CDN natural gas producing at record levels (17.2 bcf/d and ~1 bcf/d higher than last year), maintenance issues and other factors have yet to contribute to higher CDN natgas storage levels; /3

Read 5 tweets

Jeremy McCrea, CFA

@JeremyMcCreaCFA

Sep 30

A thread – Our takeaways from the Dallas Fed Energy Survey (and how sentiment has changed from prior surveys)

Costs: Expected Finding & Development costs have slowed. Only 66% of Oil & Gas companies surveyed expect costs to rise (vs 72% last quarter) #oott #WTI #oilgas #invest

A thread –Dallas Fed Energy Survey
The drop in WTI has ‘Company Outlooks’ falling quite hard from prior quarters – with only 39% reporting a better outlook (vs. a high of 82% seeing a positive outlook in 1Q22). #oott #oilandgas #WTI

A thread –Dallas Fed Energy Survey
The Uncertainty Index continues to move higher and now back to levels seen at 2Q20. This ‘uncertainty’ likely keeps upcoming capex budgets muted, putting a lid on new oil and natgas supply for 2023 #oott #WTI #crude

Read 9 tweets

Jeremy McCrea, CFA

@JeremyMcCreaCFA

Aug 22

Thread (1/5) Why have Oil & Gas stocks been so volatile? Since 2019, nearly all buying of CDN midcap E&Ps has come from high-turnover funds. Thus the first sign of WTI weakness had them rush to the exits. Encouragingly, low-turnover funds were the main buyer in 2Q buying $1.4 bln

Thread (2/5): Since 2019, most buying of CDN midcap Oil & Gas names have been from energy focused funds. Q2 was the moment where the 'Generalist' investor has finally come back (and in size), buying $1.1 bln! The sector is 'investable' again #energy #yyc

Thread (3/5): Importantly, some of the largest global funds are picking up CDN midcap Oil & Gas (finally). Given their AUM size, it can take multiple quarters to establish a position, suggesting there is more large block buying to come in future quarters #yeg #energy #CrudeOil

Read 5 tweets

Jeremy McCrea, CFA

@JeremyMcCreaCFA

Aug 9

Thread (1/5): EIA Short-Term Oil Outlook Highlights

A top concern we hear from investors is the "Backwardation in the oil strip". This price reflects a recovery in crude inventories but as the EIA revisions show today, they’re back to revising inventory levels lower again #oott

Thread (2/5): EIA Short-Term Oil Outlook Highlights

Despite recession fears & high gasoline prices, global oil expected consumption was left essentially unchanged (OECD countries revised 0.2% lower; offset by non-OECD countries higher) #crude

Thread (3/5): EIA Short-Term Oil Outlook Highlights

Although no changes were made m/m, oil supply has still been revised down from Jan forecasts. This is despite WTI prices moving higher since then. Overall, shows the discipline with producers and not rushing back to drill #oott

Read 5 tweets

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Share this page!

Jeremy McCrea, CFA

People who liked this thread also liked...

Try unrolling a thread yourself!

More from @JeremyMcCreaCFA

Jeremy McCrea, CFA

Jeremy McCrea, CFA

Jeremy McCrea, CFA

Jeremy McCrea, CFA

Jeremy McCrea, CFA

Did Thread Reader help you today?

Don't want to be a Premium member but still want to support us?

Send Email!