Big Money Moving to Oil Sands

• By the tickerspy.com Staff
• On 11:02 am EDT, Monday October 12, 2009

Oil was up to start the week, sending more interest and investment to oil sands extraction.

Extracting oil from sands is an expensive process, and when crude futures tumbled during the recession, it was hardly economical. Now that the economy appears to be stabilizing, commodities are following suit, and oil sands stocks are back in focus.

Currently, the Oil Sands Stocks Index has four components. The large-cap plays, Suncor Energy (NYSE: SU - News) and Canadian Natural Resources (NYSE: CNQ - News) are both up by 9% or more in the last month. Meanwhile, small-caps Oilsands Quest (AMEX: BQI - News) and North American Energy Partners (NYSE: NOA - News) are mixed. The former has shot up by 42% for the period, while the latter fell by -9%.

Much of the sector's recent appeal is attributable to hype surrounding investments by some major oil players. In early September, we covered China's interest in oil sands, specifically a $2 billion acquisition by PetroChina (NYSE: PTR - News).

According to a New York Times report released Friday, the Canadian and Alberta governments are helping clean up another oil sands project owned by Royal Dutch Shell (NYSE: RDS-A - News, RDS-B - News), Marathon Oil (NYSE: MRO - News), and Chevron (NYSE: CVX - News).

As more components of the Big Oil and Gas Stocks Index take interest in oil sands, it will be interesting to see if they take interest in acquisition of the sector's smaller public players. Oilsands Quest could be easily swallowed by any of the largest oil companies, although any bets on a buyout would be pure speculation at this point.

As of this writing, the Oil Sands Stocks Index is one of the top-40 performing tickerspy Indexes over the last month, up by 9.5%.

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