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Gearing Up for Suncor Energy’s 4Q16 Results

PART:
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Part 3
Gearing Up for Suncor Energy’s 4Q16 Results PART 3 OF 6

How Has Suncor Stock Performed ahead of 4Q16 Earnings?

Suncor’s stock performance

In the previous part of this series, we looked into Suncor Energy’s (SU) segment-wise outlook for 4Q16. In this part, we’ll look at Suncor’s stock performance before its 4Q16 results.

How Has Suncor Stock Performed ahead of 4Q16 Earnings?

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In 2016, since January 20, Suncor’s stock started recuperating from the falls experienced in the previous year. SU has risen 61% since then. The gain was due to a rise in oil prices because of the efforts of oil producers to support prices coupled with global supply outages and reductions.

The prices saw weakness in August 2016. But since September 20, 2016, oil prices have moved up 22%. Suncor’s stock has also risen 22% in the same period. In December 2016, oil prices spiked on the news of production cuts by OPEC also supported by Russia, a non-OPEC country. For more on this, please refer to How Non-OPEC Production Cuts Could Drive Oil Rally.

SU’s peers Statoil (STO), Petrobras (PBR), and PetroChina (PTR) have risen 25%, 17%, and 24%, respectively, since September 20, 2016. If you are looking for exposure to integrated energy stocks, you can consider the iShares US Energy ETF (IYE). The ETF has ~39% exposure to the sector.

Overall, since January 16, 2015, Suncor’s stock has moved up by 4%. During the same period, crude oil and natural gas prices have moved up by 15% and 13%, respectively. The correlation coefficient of Suncor’s stock versus WTI for the past-12-month period stood at 0.69. It also means that on average, 69% of the movement in Suncor’s stock price can be explained by changes in WTI prices. However, the coefficient of Suncor’s stock versus natural gas stood at 0.15, representing a weaker correlation.

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