Canadian energy stocks cannot be stopped at this time. Bottlenecks in oil, natural gas and coal supplies due to the conflict in Ukraine are fueling the upward trend that began last year. The Capped S&P/TSX Energy Index, the benchmark for Canadian energy stocks, is up more than 50% since January, while the S&P/TSX Composite has been trending down 5% since then.
“Following the Russian invasion of Ukraine, energy security has become a global priority, and it has had a significant impact on Canadian energy demand,” analysts at Royal Bank of Canada (RBC) said in a recent report. They expect oil and gas production to remain high for longer than previously thought, which now needs to be reconciled with the country’s climate goals. As countries, businesses and consumers struggle with rising fuel and utility bills, environmental concerns have been ignored. According to RBC Economist Colin Guldimann, Canada must now manage the equilibrium process to cover high energy demand and at the same time achieve climate neutrality as planned by 2050. In terms of the country’s energy production, fossil fuels clearly dominate (see chart) .
environmental protection with oil sand vector
The split is also evident in the stock exchange. On the other hand, the good prospects of fossil energies prevail, which is reflected in the performance of classic energy stocks such as Canadian Natural Resources and Cenovus Energy (see chart). On the other hand, companies that rely on renewable energies are increasingly attracting the attention of investors. For example, Northland Power, based in Toronto, is one of the largest developers of offshore wind turbines in the world.
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