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    Why did the energy sector see a big jump today, but Canada sector did the opposite?

    Today, the Canadian energy sector tanked in early trading, catching a lot of investors off guard. Crude prices went up slightly, so why the drop? But U.S. stocks went the opposite way, all surging. Some say it’s tied to the Venezuela situation. Do global energy stocks really react to geopolitical news like this, or is it just emotional? How long until things go back to normal?

    Why did the energy sector see a big jump today, but Canada sector did the opposite?
    byu/Impossible-Draw2750 inwallstreetbets



    Posted by Impossible-Draw2750

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    41 Comments

    1. Weird-Sleep2484 on

      It will take them years to rebuild the infrastructure Spend billions to do it Rump can’t just turn the valve and make oil flow Rump is a mob boss They bombed Iraq 2 times. Where is the Iraqi oil?

    3. WildYogu58 on

      This looks more like a sentiment-driven selloff tied to fears of future competition from Venezuela not fundamentals Oil prices haven’t really broken down so a bounce wouldn’t be surprising.

    5. TheBooneyBunes on

      Because if Venezuela gets sanctions lifted, a large part of the US energy sector will source from Venezuela and probably will cut into Canada’s bottom line.

    6. RiceOnIce2 on

      I believe Canadian Oil sands break even is quite a bit higher so if oil prices eventually fall due to Venezuela coming online then their margins compress. Additionally, I think it’s the same heavy oil that Venezuela has and was built for US refineries but getting it to a refinery from Canada is expensive because nobody wanted to approve Keystone. Venezuela coming online probably means less demand for Canadian oil which will then need to be sold at a discount (I think it already is because it’s costly to transport)

    7. Careful-Rent5779 on

      Canada’s oil reserves are mostly derived from tar sands (heavy oil).

      Venezuela’s oil reserves are also heavy oil. I’m no petroleum engineer, but I venture the Venezuelan oil is at least marginally easier (cheaper) to extract and refine.

    9. Top_Effort748 on

      I don’t think this will mess with Canada’s oil going to the U.S. Most of Venezuela’s oil like 90% goes to China.

    11. shugo7 on

      Market assumes Canada oil will have lower demand. I see this as a buying opportunity because Canada is also increasing their exports to other countries to not depend on the US.

      It will take years to rebuild the Venezuela system. Market is just too hasty.

    12. Ok-Mammoth6109 on

      US refiners gain from potential Venezuelan oil access, while Canadian producers face new competition for their heavy crude

    13. _John_Dillinger on

      because the us just freed up a bunch of heavy crude and so canada’s energy exports are suddenly less important. appears to be priced in a little early if we’re being honest

    14. Away_Read1834 on

      People are speculating that the US is going to buy more Venezuela oil and it’s going to hurt the Canadian economy more….but hey elbows up right?

    17. Viktri1 on

      Most of the posts here are wrong. The issue has to do with capex spending. More capex will go towards Venezuela and less capex + capex related spending (rent, employees, etc.) will be done in Canada. That’s the immediate impact. The market isn’t over reacting. Alberta is getting cucked.

      Markets are forward looking. Previously the Canadian energy market was priced for growth. Now it is priced for less growth.

    18. Overhear_Overponder on

      Cause us dont need Canada now. They got a shiny new oil toy in a nice tropical environment. Why slum it in the tundra.

    19. mrroofuis on

      Typical overreaction by the markets

      They’re anticipating “huge revenues” for energy companies

      All the while ignoring basic economics. A rise in supple would cause the price per barrel to decline. Making it unprofitable to extract

      And completely disregards the unstable nature of extracting oil in a country like Venezuela

    23. PaulBleidl on

      Because when he takes over Canada he will take that oil good for us oil companies and not Canada.

    26. Neither-Historian227 on

      USA is reliant on Canadian 🛢️, now that they control Venezuela, USA companies have the green light. Window is about 3-5yrs.

    27. Slight-Big8584 on

      The Market priced in a large possibility Venezuelan Crude will hit markets relatively soon.

      Canadian Crude may be let valuable as a result, so their pricing went down.

    28. pipasnipa on

      What the market is missing is that much of Canadian heavy crude is refined in the Midwest. That supply chain dynamic will not change. The US Gulf complex refineries will begin to refine Venezuelan sour crude once the Venezuelan infrastructure is revamped.

      So I see Canadian energy producers like CNQ as undervalued here.

    30. AJH501 on

      Canadian stocks fell on worries about volatility and policy risk. U.S. names with complex refineries and logistics exposure rose because they benefit from wider refining margins when heavy crude is scarce.

      For new Venezuelan heavy-oil expansion to be worthwhile, anybody thinking logically long term needs $80+ Brent to upgrade infrastructure and the high capital needs. Existing Canadian production works at much lower prices.

      “Back to normal” depends on barrels. If supply isn’t actually lost, reactions will fade. If Venezuelan heavy crude really exits the market, the new normal is higher diesel and freight costs rippling through the rest of the market rather than a quick snap-back.

    31. cultoftheclave on

      DNN, (Denison Mines) one of a handful of companies both in the Canada sector and the uranium sector, did quite alright today.

      Sort of a low flying midcap ticker, but its performance today would suggest that the energy or at least the nuclear energy updraft is considerably stronger than the Canadian energy downdraft, when the two forces come into direct contact at a single point.

    32. darth_lack_of_joke on

      It’s not just Canada. Even oxy dropped. I think we got bamboozled to sell candians and buy xom and cvx, but really we should do the opposite for the next 3-5 years.

    35. nateccs on

      if the US gets access to Venezuelan oil there will be less demand for canadian crude. the companies traditionally refining Venezuelan oil include VLO and CVX which is why were up $10-$20 per share on sunday.

    37. Siva-Na-Gig on

      I see a lot of technical analysis in here that is very good and informative. Having said that I feel most investors work on ‘vibes’ so the US just gained a bunch of new oil and “haha” to everyone else.

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