A Weekly Recap of All Things Resources to Friday, October 28th

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‘That’s a Wrap’

By Rod Blake

Resource investors began the week with some optimism in that save for the petroleum sector, commodity prices look to be slowed their multi-month declines and the U.S. dollar seems to have peaked.

The Biden administration increased its pressure on Nicaraguan President Daniel Ortega’s authoritarian rule by signing an executive order to ban Americans from participating in the central American country’s gold industry.

All of which caused the share price of Nicaraguan gold miner Calibre Mining Corp. ‘CXB-T’ to crater by $0.41 or 41.41% to $0.58.

Similarly, Pure Gold Mining Inc. ‘PGM-V’ shares’ plunged by $0.09 or 75.0% to $0.03 after the junior gold producer sighted cash and working capital concerns in suspending operations at its Pure Gold Mine in Red Lake, Ontario.

In the oil patch – Data from the Alberta Energy Regulator revealed that the province’s petroleum sector has drilled 6,563 wells so far this year – already more that the 6,166 wells they drilled in all of 2021.

Meanwhile – the timely Baker Hughes Petroleum Rig Count reported the number of active American drilling rigs fell by 3-rigs to 768, an increase of 224 from this time last year. Up north – the number of Canadian active rigs rose by 2-rigs to 212, an increase of 46 in the past year.

All of this while the International Energy Agency (IEA) warns that tightening markets for liquefied natural gas (LNG) and major oil producers cutting supply have put the world in the middle of “the first truly global energy crisis.”

The list of Canadian petroleum companies to raise their dividends grew by three after Calgary based Crescent Point Energy Corp. ‘CPG-T & N’ declared a special dividend of $0.035 per share while Imperial Oil Ltd. ‘IMO-T & N’ raised its quarterly dividend by 29.41% to $0.44 and Prairie Sky Royalty Ltd. ‘PSK-T’ doubled its quarterly dividend to $0.24 per common share.

Meanwhile, south of the border – Imperial’s parent company Exxon Mobile Corp. ‘XOM-N’ announced a record 3rd-quarter profit of US$19.7-billion.

The way I see it – In over 3+ decades as a broker one gets a heightened sense of awareness to changes in market sentiment. This could be one of those times as it seems to me that with rising interest rates –  investors are punishing companies that issue negative reports or growth stocks that don’t grow, and they are migrating towards those companies with improving returns and rising dividends such as the current petroleum sector.

For the second time in its history – Teck Resources Ltd. ‘TECK.B-T % ‘TECK-N’ exits the petroleum sector. This time by selling its 21.3% interest in the Fort Hills Oil Sands Project to senior partner Suncor Energy Inc. ‘SU-T & N’ in an all-cash deal of some $1-billion.

Noteworthy in a sector that has recently been facing economic constraints – West Fraser Timber Co. Ltd. ‘WFG-T & N’ reported 3rd-quarter financials that beat the streets’ expectations.

Reuters looked into available data and projected that by 2030 – automakers will double their spending  to US$1.2-trillion in electric vehicles (EVs), batteries and other raw materials to produce them.

For the Week – the DJI gained 5.02% to 32,861 with the S&P 500 up by3.94% to 3,901 and the NASDAQ ahead by 2.23% to 11,102. In Canada – the TSX rose by 3.23% to 19,471 and the TSX Venture gained 0.67% to 597. The CBOE Volatility Index or VIX fell by 12.33% to 26.03.

With currencies – the Canadian dollar rose by 0.26% to 0.7351 while the U.S. dollar ‘DXY’ fell by 1.05% to 110.70.

With commodities Gold bullion lost 0.84% to US$1,644 with silver down by 0.82% to US$19.24 and copper off by 0.11%  to US$3.48. Crude oil lost 2.14% to US$84.97 as natural gas fell 22.28% to US$5.02. Overall – the CRB Commodities Index fell by 3.62% to 293.

And Finally – The rich and/or famous seem to have no qualms in telling the rest of us to cut back to help save the planet. But a recent review by data company Wingx revealed these same people own about 22,000 private jets that took more than 3-million flights last year with each aircraft emitting up to 2-tonnes of carbon dioxide (CO2) every hour.

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