$41.37
0.00 (0%)
Petro-Canada (USA) (PCZ.DL)
CAPS Rating:
The Company explores for, develops, produces and markets crude oil, natural gas liquids and natural gas in Canada and internationally.
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My bet is that oil prices will decrease as the economy slows in the US. This would cause a double-blow to the stock price of Canadian oil companies that are priced in USD, since the CAD is likely to go south against the USD if the oil price decrease. Even if oil remains at this level, I would expect the CAD to go down by 10%-15% in the next year. As a consequence, I doubt that PCZ could outperform the market.
Economy slowing in US - yes
Major demand for oil is driven by countries that have rapid growth like India, China and Japan. Those countries don't care what the price is per barrel. I think the CDN will probably stay at par with USD (not sure what the price was when you put this comment). I say PCA goes up.
Canadian oil is a reliable for U.S.
I do agree that if the price of oil declines the Canadian dollar will decline as well. Added is the spectra of increased inflation in the US which should push up interest rates and increase the value of the American dollar. However, a decline in the Canadian dollar which help increase the profitability of the Canadian operations of PCZ, since oil is sold in US dollars but costs occur in Canadian dollars.
Majority of operations are in Canada. Oil is sold in US dollars. Thus, decline in Can dollar should let company make out great on the exchange rate.