Suncor’s Stock Performance before Its 2Q17 Earnings



Suncor’s stock performance

In the previous part, we considered Suncor Energy’s (SU) segment-wise outlook for 2Q17. Now, we’ll examine Suncor’s stock performance before its 2Q17 results. Suncor stock ended 1Q17 on a low note due to the fall in oil prices.

Article continues below advertisement

WTI prices since April 2017

Since April 3, 2017, WTI prices have declined 10.1%. The downtrend in oil prices is mostly due to oversupply concerns despite the OPEC cut. In May 2017, oil prices rose in anticipation of the meeting of the main oil producers. However, the uptrend quickly reversed as the cut was deemed weak in dealing with oversupply concerns.

Oil import demand is slowing from India, China, and Japan. On the other hand, Nigeria and Libya are witnessing a rise in oil production in 2017. Oil production in the US is expected to increase in 2018.

Suncor stock has plunged since April 2017

The fall in oil prices has taken a toll on Suncor stock, which was trending up in May 2017. From April 3, 2017, to May 24, 2017, Suncor stock gained 3.5%.

However, Suncor stock began shedding its gains after the meeting of OPEC and non-OPEC members on May 25, 2017. Since the meeting, WTI prices have fallen 11.4%. Suncor stock fell 8.0% after the meeting.

Overall, Suncor stock has fallen 4.8% since April 3, 2017. Suncor stock has shown a high positive correlation of 0.66 with WTI prices since April 3, 2017. This means that the variations in WTI can justify ~66% of the variations in Suncor stock. However, considering the SPDR S&P 500 ETF (SPY), Suncor stock has underperformed the broader market. SPY has risen 3.5% since April 3.

In line with Suncor stock, YPF (YPF), PetroChina (PTR), Petrobras (PBR), and Statoil (STO) fell 8%, 16%, 13%, and 2%, respectively, since April.

Please read the next part to see how Suncor’s pre-earnings moving averages are trending.


More From Market Realist