What's Boosting Canadian E&Ps To The Top Of The Oil Charts?

Even though the price of crude is hovering around the $50 per barrel mark since the beginning of the year, an improvement from the year-ago level is already in evidence. Given such a backdrop, investing in of oil and gas upstream companies seems prudent as these firms are posed to gain the most.

By now, it’s well known that the crude price recovery was mainly backed by OPEC’s November deal to curb output. The historic accord, together with help from non-OPEC producers have seen oil prices more than double from their last February lows to around $50 a barrel. Analysts now expect the OPEC deal to be extended beyond Jun 2017, further strengthening oil prices.

In such circumstances, it is highly probable that oil’s bullish run will benefit the overall upstream business or the oil exploration and production (E&P) operations. This, in turn, will generate more lucrative returns for investors.

What Does the Future Hold for Canadian E&P Industry?

Among the industries in the Oil & Energy sector, Oil & Gas-Canadian Exploration & Production is ranked #19 and lies in the top 7% of industries. Investors should know that that the top 50% of the Zacks Ranked industries is likely to outperform the bottom 50% by a factor of more than two to one. For more information please refer to our Zacks Industry Rank.

Major companies belonging to the industry include Gran Tierra Energy Inc. (GTE - Free Report) , Enerplus Corp. (ERF - Free Report) , Encana Corp. (ECA - Free Report) and Canadian Natural Resources Ltd. (CNQ - Free Report) . We note that Gran Tierra sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Oil price improvement should bode well for the Canadian E&P industry as the companies belonging to this sector will be able to sell the commodity at higher prices.

Could the Industry Reap More Return Than S&P 500?

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