By Sumit Roy
Five minutes with Oppenheimer's Gheit on energy.
Fadel Gheit is a managing director and senior analyst covering the oil and gas sector for NewYork-based Oppenheimer & Co. He has been an energy analyst since 1986 and was named to The Wall Street Journal All-Star Annual Analyst Survey four times. HAI's Sumit Roy caught up with Gheit recently to discuss the latest developments in the oil and gas markets.
HardAssetsInvestor: Natural gas inventories have fallen to the lowest level in a decade, yet prices haven't rallied all that much. Why do you think that is?
Fadel Gheit: Gas prices are influenced by the industry's ability to deliver supply rather than by inventories. Gas production will continue to rise because of [associated] gas from oil and liquids-rich plays. In addition, drilling obligations to keep leases will keep output rising.
HAI: What is your price outlook for natural
US energy stocks outperformed Canadian ones last year - but in the last few months, E&P equities in the Great White North have soared. Why? The low Canadian dollar has a lot to do with it, adding an extra 6-10% to the Canadian oil price-which of course is ALL profit.
The second reason is the natural gas prices have rocketed up, thanks to repeated cycles of the Polar Vortex. Canada is a gassy basin, despite all the tight oil finds of the last five years. And lastly, the continued growth of the oilsands - along with the potential of LNG exports off Canada's west coast-have kept a bid under the services sector.
I talked with Chris Theal, CEO of Calgary's Kootenay Energy Fund - as I do every quarter - to help me get a handle on the future of Canadian oil, natural gas and energy services. He has a
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