Tanks are seen at a BP oil refinery in Gelsenkirchen, Germany, Monday, March 7, 2022. Crude oil prices slumped to a 10-month low Monday on a report that OPEC plus may hike output at its next meeting. THE CANADIAN PRESS /AP-Martin Meissner

By Amanda Stephenson in Calgary

Crude oil prices slumped to a 10-month low Monday morning before rebounding at midday, adding to the volatility that has dogged the Canadian energy sector recently.

The benchmark West Texas Intermediate plunged by as much as US$5 in the early part of the day, trading as low as US$75 in reaction to a Wall Street Journal report saying Saudi Arabia and other OPEC-plus countries may increase oil output by up to 500,000 barrels per day at their Dec. 4 meeting.

Such a move would be an about-face for OPEC plus, which earlier this fall agreed to cut production by two million barrels per day. If it happens, a production hike would help to offset new European Union sanctions on Russian oil, which are set to take effect Dec. 5.

Oil prices have been unravelling in recent days, with the WTI benchmark losing eight per cent of its value last week alone. Traders have been worried about the impact of a possible global recession on oil demand, as well as rising COVID cases in China and their potential for slowing the economy in that country.

While crude prices did rebound by midday Monday to make up much of the day’s losses, oil has still lost close to 30 per cent of its value since its June peak, when WTI hit an eye-popping US$110 per barrel.

That’s weighing on Canadian energy stocks, said Rory Johnston, energy analyst and founder of the Commodity Context newsletter.

“If you remember back to the beginning of this year, or even that April to June period, there was pretty much this solid thesis underpinning all oil companies, and specifically Canadian oil companies  . . . which is that ‘we know things are going to get tighter, we know prices are going to stay high,’ ” Johnston said.

“But this volatility is going to make anyone who wasn’t certain about that thesis in the first place take a step back.”

The S&P/TSX capped energy index was down 2.17 per cent as of midday Monday, while the S&P/TSX composite was down 0.32 per cent, weighed down by energy sector losses.

The S&P/TSX capped energy index has declined approximately 10 per cent since June. However, many Canadian oil and gas companies have said they can still earn healthy profits with a WTI price in the US$70 range.

With oil prices as high as they’ve been this year, Canadian energy companies have been investor favourites for much of 2022.

A ranking released in September of the best-performing stocks on the TSX showed that 14 of the 30 top spots by that point in 2022 were oil and gas companies.

This report by The Canadian Press was first published Nov. 21, 2022.

The Canadian Press

News from © The Canadian Press, 2022. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • 0076 Latus only
    0076 Latus only
  • 0073 SaskWorks-Pipeline Online
    0073 SaskWorks-Pipeline Online
  • 0067 PFM SaskWorks Payroll Investment Plan
    0067 PFM SaskWorks Payroll Investment Plan
  • 0064 Estevan OTS
    0064 Estevan OTS
  • 0063 Turnbull Excavating hiring crusher
    0063 Turnbull Excavating hiring crusher
  • 0062 TED_EPAC_Technology_30
    0062 TED_EPAC_Technology_30
  • 0061 SIMSA 2024 For Sask Buy Sask
    0061 SIMSA 2024 For Sask Buy Sask
  • 0058 Royal Helium Steveville opens anonymous rocket
    0058 Royal Helium Steveville opens anonymous rocket
  • 0055 Smart Power Be Smart with your Power office
    0055 Smart Power Be Smart with your Power office
  • 0052 Predator Inspections
    0052 Predator Inspections
  • 0051 JML Hiring Pumpjack assembly
    0051 JML Hiring Pumpjack assembly
  • 0049 Scotsburn Dental soft guitar
    0049 Scotsburn Dental soft guitar
  • 0046 City of Estevan This is Estevan
    0046 City of Estevan This is Estevan
  • 0041 DEEP Since 2018 now we are going to build
    0041 DEEP Since 2018 now we are going to build
  • 0032 IWS Summer hiring rock trailer music
  • 0022 Grimes winter hiring
  • 0021 OSY Rentals S8 Promo
  • 0018 IWS Hiring Royal Summer
  • 0013 Panther Drilling PO ad 03 top drive rigs
  • 0011
  • 0006 JK Junior
  • 0002 gilliss casing services
    0002 gilliss casing services
  • 9002 Pipeline Online 30 sec EBEX
    9002 Pipeline Online 30 sec EBEX
  • 9001