With the so far largest US Trade Deal announced on Sunday (with the EU), one is left to ponder whether Canada’s lunch has been stolen ($750B Energy purchase committed that could have been Canada’s) or is there any opportunity remaining for Canada to participate in this upside?
We are of an opinion that, although direct Canada-Europe deal would have been much better, in fact, this US-EU deal is a tailwind for Alberta Oil and Gas.
Here is why:
- We see increased domestic (US) demand for Canadian Energy. US relies heavily on Canadian hydrocarbons for their domestic need and anything that could have been used as a subsitute for Canadian imports will be in factz exported. This creates demand for Canadian imports.
- Boosting investment into Canadian energy infrastructure, especially Natural Gas pipleines and LNG, to diversify exports. With the US EU Deal and uncertainty of the tariffs on Canada itself, this is not optional any more.
- Continued global demand, as Asian economies energy transition and global AI-boosted computing power hunger intensifies. With more US energy going to Europe, Canada would be smart to capture more of this market.
- Levelling of world Energy prices. especially Natural Gas. Canada is at the extremity of global Natuiral Gas prices scale, with companies often selling domestically for under US$1/MCF while Europe, Asia happily pay $10+. Any increase in demand will affect North American Market and will eventually benefit Canadian producers.
There are more reasons but those we see as top ones.
Of course it would have been much better if Canada struck direct deals with the likes of Germany and Japan. Not that they were not asking… But elections have consequences and Canada opted federally to forego major opportunities but will nonetheless benefits from crumbles from the table of the US.
In either case, North American Energy Market wins.
The Albertan Energy Companies we monitor and invest in are the likely benefactors of this change.