Canadian govt has just approved the acquistion of nxy by the China national oil comapny cnooc.
The nooc is pretty smart picking up a Canadian oil at these undervalued prices. China nows where price of oil is going long term and it knows about its demand/needs as well as what is happening around the world like in India etc. If cnooc waited could they have gotten a better deal say if price of oil comes down further? The risk is that if cnooc waits its probably know its going to have more rules that could block its takeover attempt. cnooc (China) is lucky to get their deal done before new and tougher laws get passed or a less business friendly government comes to power in Canada. Point is China knows that price of oil is going much higher in the long term and is smart to tie up oil assets while it still can. It is also possible the the US blocking the keystone pipeline from Canada and forcing Canadian oil to trade at a discount let to Canadians approval so that they can get more oil to alternate markets. Bottom line is oil is trading at a discount but how long the govt can support that is the question. Severely discounted Canadian oil is going to find a path to other markets in time and likely crude will rise to brent pricing in time as well.
"Hey Lisa...what do you think of the drop in SJT.....? I can't figure out why it was up pretty significantly last week, and now it's about to hit the 52 week low...tax loss selling?"
Don't know why I can't reply to some posts...the puzzler is not the drop but why it went up last week - that made no sense as NG price was falling. Forget trying to understand daily price moves, it's all about NG prices which means in the short term all about the weather. So far the start to winter has been pretty mild. If is doesn't get colder soon, NG will be in for a double dip, to use the term being bandied around here a lot.