Five Canadian oil & gas stocks that slipped below our fair value estimates

WTI crude oil has fallen nearly 30% in value over the past six weeks, dragging down the share price of oil and gas companies.

Ruth Saldanha 14 November, 2018 | 6:00PM

Oil is rebounding today after a fall that wiped out around 28% of the value of West Texas Intermediate crude over the past six weeks. On Monday, WTI crude fell 8%.

Morningstar senior equity analyst Dave Meats said that the latest oil price declines came after OPEC reported overall production growth of 127 million barrels per day in October, noting that the supply shortage fears that drove up crude prices earlier this year now look overblown.

"In fact, key OPEC producers are now contemplating the need for further production cuts next year to avoid a glut forming instead," Meats said in an analyst note, cautioning that further volatility is likely, as OPEC's remaining spare capacity is unknown, and it's possible that steep declines are still on the way for Iran and Venezuela -- not to mention Angola, Libya and Nigeria.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canadian Natural Resources Ltd39.81 CAD-1.58
Cenovus Energy Inc11.95 CAD-2.29
Enbridge Inc55.31 CAD-0.18
Encana Corp20.89 CAD-3.47
TC Energy Corp75.88 CAD-0.24

About Author

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca