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As investors dump oil holdings, Canadian Natural overtakes Suncor as Canada’s most valuable energy company

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Even with the premium offered, TC Pipelines shares are still down 32 per cent on the year, as the coronavirus pandemic has been bearish on all companies in the oil and gas business.

“Everybody has had a tough year. Suncor has had an incrementally tough year,” BMO’s Ollenberger said. “In addition to the coronavirus pandemic-caused collapse in both oil prices and refining margins, Suncor has had to deal with the fact that its refinery in Edmonton was down for eight weeks, there was an unplanned outage at its main oilsands mining operation and it still hasn’t been able to ramp up its recently built Fort Hills oilsands mine to full capacity.”

Everybody has had a tough year. Suncor has had an incrementally tough year

Randy Ollenberger, BMO Capital Markets analyst

Suncor, once the second most valuable company in Canada behind Royal Bank of Canada, has plunged an astounding 63 per cent this year from $42.56 per share on Jan. 1 to $15.55 each on Oct. 1, marking the company’s lowest price since 2003, when it was a much smaller oil producer. RBC has also lost its crown to Shopify Inc.

The company’s shares have rallied slightly since announcing plans to lay off up to 2,000 people, or 15 per cent of its employees, on Oct. 2. Suncor shares traded up less than 1 per cent to $15.97 each midday Monday.

Ollenberger said that at recent prices, the value of Suncor’s downstream business is not accurately reflected in the company’s shares and he is recommending investors increase their positions.

Both Suncor and Imperial Oil are on pace to deliver significantly improved refining results in their third quarter results, Tudor Pickering and Holt analysts wrote in a Monday research note. They expect Suncor’s and Imperial’s refining operations to outperform those of Husky and Cenovus.

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