While Canada’s oil industry has faced output hiccups as a result of environmental protesters and wildfires, there are many risks it won’t face.
The attack on a Saudi Arabian oil field Saturday is still sending reverberations through markets, and it could have long-term implications for much more than just the price of crude. Just about every market was moved by the attack amid fears or hopes of how it could reprice assets.
Oil prices certainly saw the biggest move, with US WTI crude futures rising by 15%, the largest uptick since 2008.
Stock prices fell, with the Dow, S&P and Nasdaq all ending the day lower. Airlines were hit hard as JetBlue and United Airlines both fell nearly 3% while American Airlines dropped 7.3%.
Energy stocks, on the other hand, had their best day of the year, with the S&P Oil & Gas Production ETF jumping almost 11%, and the S&P energy sector rising out of a bear market with its best session of 2019.
Yields on the benchmark 10-year Treasury note fell by the most in 3 weeks, as traders sought safe haven US government debt. Gold prices also jumped 1%.
Saudi officials also said they may delay an IPO for state oil company Saudi Aramco as a result of the attacks.
Canada responds
Alberta Premier Jason Kenney, whose province produces more oil than most OPEC nations, has a message for environmentalists, investors, and anyone else who will listen: The world needs more Canadian crude, and standing in the way is foolish.
Kenney’s United Conservative Party swept to power in April. He’s traveling to New York and Ohio this week and planning trips to the UK, Germany, and possibly Asia in the coming months to tout the benefits of Canadian oil, which he says has gotten a bad rap from critics who have unfairly demonized Alberta’s oilsands. Against the backdrop of a drone attack in Saudi Arabia that idled 5% of global oil production, Canada offers a safe, secure, and socially responsible source of energy, Kenney said.
Alberta produces almost 3.8 million barrels of oil a day, trailing only Saudi Arabia, the US, and Iraq.
The US visit represents Kenney, 51, following through on a campaign promise to go to bat for Alberta’s oil industry, whose oilsands have become a target of environmentalists concerned about greenhouse gas emissions. Kenney has also started a C$30 million “war room” to combat misinformation about the province’s energy industry.
Kenney has likewise touted environmental advancements made in Alberta that have lowered the emissions intensity of projects and said exporting Canadian natural gas and having it displace coal in China could be a top strategy for combating climate change.
