Brokerage Canaccord Genuity begins or resumes coverage of Canadian energy exploration and production (E&P) companies. Brokerage says domestic E&P equities have declined an average of ~18% since early June, tracking crude benchmarks which fell ~27% as investors fear cen. bank tightening and demand destruction
However, believes mid- and long-term outlook for E&Ps remains upbeat as inventories are depleted, demand concerns are overblown and the U.S.’ historic SPR release is coming to an end this fall
Points to recent OPEC and EIA reports on strong demand and dwindling inventories
Says some headwinds still remain, including recession fears, bank policy tightening, Chinese economic slowdown and possible return of Iranian oil (1% of global output) on market.