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Why Short Interest in Suncor Has Risen

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Jun. 28 2019, Updated 7:43 a.m. ET

Short interest in Suncor

Short interest (percentage of outstanding shares) in Suncor Energy (SU) has risen by 0.19 percentage points over April 1, the beginning of the second quarter, to the current level of 0.64%. Usually, the rise in short interest implies an increase in the bearish sentiment in a stock. Also, during the same period, Suncor’s stock price has fallen by 2.84%.

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Why the change in sentiment?

The marginal rise in bearish sentiments in Suncor could have been due to lower oil prices partly offset by better-than-expected first-quarter earnings. In the current quarter, WTI has fallen 4%. Oil prices also stand lower on a quarterly average basis. WTI stands about 11% YoY lower in Q2 2019. Thus, lower oil prices could impact the company’s upstream earnings in the quarter. However, this could be partly offset by Suncor’s higher upstream volumes.

Suncor’s upstream production rose by 11% YoY to 0.76 MMboed (million barrels of oil equivalent per day) in Q1 2019 led by higher volumes at Fort Hills and Hebron. Plus, Syncrude’s high asset reliability boosted production. Plus, Suncor’s cash operating cost at Fort Hills and Syncrude declined steeply by 45% YoY and 27% YoY to $30 per barrel and $37 per barrel, respectively, in the first quarter.

Peers’ short interest

Short interest in Suncor’s peer Chevron (CVX) has also risen by 0.04 percentage points over April 1, to the current 0.94%. Also, short interest in Total (TOT) and PetroChina (PTR) have increased by 0.04 and 0.02 percentage points, respectively, over April 1 to 0.07% each. Chevron has risen by 0.37%, but Total and PetroChina have declined 0.36% and 15.59%, respectively, since April 1.

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