Suncor CEO says he’s not counting on oil risk premium after Saudi attacks
Mark Little says market reaction to the sudden loss of some Saudi oil output was likely magnified because it occurred during a relatively quiet geopolitics period
CALGARY – The CEO of Suncor Energy Inc. says his company isn’t counting on higher cash flow despite analyst expectations of a “risk premium” on crude oil prices in the wake of last weekend’s attacks on Saudi Arabian oil facilities.
Benchmark oil prices jumped Monday by more than 14% but gave up some of their gains Tuesday after Saudi Arabia’s energy minister reported that 50% of the production interrupted by the attack had been restored.
Mark Little says market reaction to the sudden loss of some Saudi oil output was likely magnified because it occurred during a relatively quiet geopolitics period, but the situation is not that unusual.
He says the benefit to Canadian oil producers is that the incident forces consumers to be more aware of where their crude is coming from and how secure that source might be.
Speaking after participating in a conference in Calgary, he welcomed reports that Premier Jason Kenney spoke in favour on Monday in New York of a proposal put forward by companies including Suncor to ease provincial oil curtailments for producers who add crude-by rail capacity to help relieve a glut of oil in Alberta.
He says rail is the only short-term opportunity for Alberta producers to move more oil out of Canada because export pipeline expansions have been stymied.
“I think people will think a lot more about security of supply. And Canada is a great place to be buying your energy from,” Little said.