Last month, we wrote about oil breaking through its 50-day moving average of $72 and approaching its 200-day moving average of $77. At the time of writing today, oil is at $83 and appears to be moving higher. More importantly, this trend applies across many of the oil and gas stocks, which usually bodes well for the commodity as a whole. There is a saying that "stocks lead the commodities" meaning stocks tend to go up before the commodities do.

 

The title of this note refers to the fact that making forecasts can be very painful, especially when you put them in print! However, oil inventories are at record lows, weekly inventories are declining at record rates, and rig counts are going down. No matter how negative you might feel about oil and gas, it appears that we may have a supply problem over the next six months. Combine this with the seasonality point of view that oil and gas stocks tend to do well during the last quarter of the year and were setting up for an interesting four-month period. I should note we are overweight with oil and gas in all of our models.

 

Source; Eric Nuttall Nine Point

 

I am also pleased to announce that Allison Cronkwright has joined our Wood Gundy team. Ali has previous experience in retail and private banking where she provided advice to clients on cash management, credit planning, and investing. She is a Registered Representative and will be helping with financial plans, trading, and admin. In her spare time, Ali enjoys hiking, golf, skiing, and pickleball, and is an avid Flames fan.

 

I've also included a piece from our CIBC Economics team entitled "What would Fallstaf do?".

 

As always, if you have any questions, please feel free to give us a call at any time.

 

Have a great long weekend.

 

Milan