Connect with us

Also Interesting

Canadian Energy Companies Benefiting From Global Turbulence

Published

10 minute read

The world is going through a lot of chaos right now. From a war in Ukraine to a looming recession back home, people are struggling to live as normal. But through this all, the biggest Canadian energy stocks are getting stronger. Why is this and should you invest?

Before getting into the specifics of the stock market and why commodities are benefiting, it is important to go through every global event that is having a major impact.

The glut of global turbulence

Russia’s Invasion of Ukraine

To start with, Russia’s invasion of Ukraine is the most obvious factor in global turbulence at the moment. The world was not ready to deal with such an invasion. Negotiations were expected to keep Russia from choosing this approach, considering what they would have to lose. Massive sanctions would cripple Russia’s economy, and a war would not seem worth it.

However, they went ahead and global sanctions went into place. Unfortunately, these sanctions do not only affect Russia. Rather, they impact just about every other country as well. Russia bears the biggest brunt, but without the resources they provide to other
countries, the world is struggling to cope.

This is hurting developing countries more than any other, as they do not have the resources to spend on low supplies of energy in high demand. Locals are paying the price, with costs rising dramatically. However, developed nations are struggling as well, including the US and Canada. We’re seeing record high inflation that is making life difficult for everyone. We may face shortages if this war continues for much longer.

China’s COVID Lockdowns

While it has started to feel like COVID is finally over, China has been implementing new lockdowns to control another wave. This has led to a low supply of goods coming from China, impacting trade around the world at a time in which supply of almost every
commodity is low.

It’s not just the lack of production on Chinese shores that is impacting the rest of the world. The reality they are going through is causing a lot of unease. The pandemic started there, after all, and their inability to contain it led to the events of the past two and a half years. Fears that they will trigger a new wave with disastrous consequences are not unfounded.

Supply-chain issues caused by the pandemic around the world have still not returned to normal. If lockdowns go into place globally, these issues will get worse once again and it will be even more difficult to recover.

Global Recession

The threat of a global recession that rivals the Great Recession is looming over us. In the US, out-of-control inflation in spite of high interest rates, along with highly overvalued properties, are driving fears.

Whether a recession will occur and how bad it will be is impossible to determine at this point. But the potential is causing people to make decisions with huge financial consequences. This leaves us all the more at risk of chaos.

In this context, why are the biggest Canadian energy companies benefiting? What does this mean for stock traders?

Energy is in high demand

The above events have all impacted the supply of many commodities. Whether it is due to sanctions or lockdowns in China, it is becoming extremely difficult to get hold of just about any consumables. However, there is nothing in higher demand than energy.

Energy is by far Russia’s biggest export. Russia is also one of the biggest exporters of energy in the world, especially when it comes to crude oil. For this reason, sanctions are not all-encompassing. Many European countries simply cannot function without importing Russian energy.

The same is not true for the US, who have been able to cut off all energy imports from Russia. But it is still not comfortable, and all kinds of energy are in high demand.

This is particularly good for the biggest Canadian energy companies. One of the reasons the US can survive without importing Russian energy is due to the supply of energy from Canada. With such high demand, and supply that is limited to an extent, the price of
Canadian energy has risen rapidly.

The strength of the US dollar

With all of that being said, you may be wondering why Canadian energy companies are benefiting so much while US companies are not having as much luck. This has a lot to do with the strength of the US dollar.

The US dollar is considered a safe haven currency. It tends to stay strong regardless of what is happening in the world. This becomes a self-fulfilling property, as currency traders flock to buy US dollars in times of trouble, causing it to strengthen in spite of economic downturns.

China’s difficulties also boost the US currency, as traders turn to the US to import goods unavailable during China’s lockdowns.

The strength of the US dollar is, at least in the short term, great for Canadian energy companies. With demand for their energy in the US higher than ever, they are receiving US dollars that are particularly strong and have more buying power in Canada. The biggest Canadian energy companies are therefore flying higher than their US counterparts, who are earning the same dollars which, due to high inflation, have lower buying power than before.

Of course, this is a double-edged sword. Right now, the strength of the US dollar is great for Canadian energy companies. But over time it will start to impact the cost of all imports from the US, increasing the expenses these companies face and cancelling out any benefits.

Should you invest in Canadian energy stocks?

Bringing this back to the buying and selling of commodities on the stock market, is this the perfect time to invest in the biggest Canadian energy stocks? While it may seem so, the answer is a little more complicated than you might think.

The problem with the current strength of Canadian energy companies is that it is caused by factors that are supposed to be temporary. Sanctions on Russia are not meant as a punishment for their crimes. Rather, they are in place to put pressure on Russia to end the war before their economy collapses and they are bereft of necessary resources.

It is either that or the rest of the world capitulates due to an inability to cope with the rebound effects of the sanctions. Either way, Russian energy exports go back to normal and the price of Canadian energy stocks drops significantly.

The same is true when it comes to China and its COVID lockdowns. They may be driving up the price of the US dollar right now, but things will soon get back to normal. China’s approach of implementing harsh lockdowns ensures that they last the minimum amount of time. This is already happening, with China’s economy just experiencing its best month since February.

This is not to say that Canadian energy stocks are a bad investment. But, if you are to invest in these stocks, you need to be prepared to watch the market carefully. Things can change in an instant, and you can see your investment lose its value.

Todayville Content Team works with a wide variety of clients to develop compelling content solutions. Our experienced team develops strategic campaigns that use video and storytelling, digital advertising and social media to help our clients position and distinguish themselves in the market.

Follow Author

Also Interesting

Top 6 Remote Holiday Destinations in Canada

Published on

If you’re planning a trip to Canada any time soon, you’ll definitely need to check out one of Canada’s remote locations. They’re absolutely stunning and unlike anywhere else in the world. Whether private jet rental is your go-to or you prefer to fly economy, we’ve got you sorted.

In this article, we’ll be exploring 6 of Canada’s best remote vacation locations, telling you everything you need to know about the area and what you can get up to while you’re there.

1. Tofino, British Columbia

If you’re looking for a remote location that offers stunning natural beauty and plenty of activities to keep you busy, then Tofino is definitely the place for you. This small town is located on the west coast of Vancouver Island and is well-known for its surfer-friendly beaches, lush forests, and wildlife watching opportunities.

There are plenty of great hiking trails in the area too, so it’s perfect if you love being outdoors. Regarding accommodation, there are plenty of cozy cabins and lodges to choose from, making it ideal for a romantic break, and you can watch the stars from your hideaway.

2. Churchill, Manitoba

Churchill is another great option for those who want to experience some of Canada’s incredible natural beauty. This small town is located on the shores of Hudson Bay and is well-known as one of the best places in the world to see polar bears in their natural habitat. There are also plenty of other animals to spot in Churchill, including beluga whales and arctic foxes. And if you’re feeling adventurous, you can even go dog sledding or take a ride on a quad!

When it comes to accommodation, there are several hotels and bed & breakfasts available as well as a few camping sites if you’d prefer something more rustic.

3. Gros Morne National Park, Newfoundland

If Gros Morne National Park sounds familiar, it may be because this breathtaking location was used as a filming location for Game Of Thrones! Located on Newfoundland’s west coast, Gros Morne National Park offers visitors stunning views of towering mountains, pristine lakes, and a rugged coastline.

There are also numerous hiking trails throughout the park which range from easy walks to challenging hikes. If you visit during winter, you can even go snowshoeing or cross-country skiing! When it comes time to find somewhere to stay overnight, there are several campsites available as well as a few hotels in the nearby town of Rocky Harbor.

4. Iqaluit, Nunavut

Iqaluit is the capital of Nunavut and is located on the southern tip of Baffin Island. This remote location is home to some of Canada’s most stunning scenery, including snow-capped mountains, glaciers, and fjords. And if you visit during winter, you may even be lucky enough to see the Northern Lights!

There are plenty of outdoor activities to keep you busy in Iqaluit, including hiking, dog sledding, and ice fishing. It’s plenty enough remote and while that does limit your options when it comes to finding somewhere to sleep, you should still be able to find somewhere; just keep an open mind.

5. Pangnirtung, Nunavut

Pangnirtung is another excellent option for those looking to experience the beauty of Nunavut. This small town is located on Baffin Island’s east coast and is surrounded by stunning mountains and glaciers. There are plenty of outdoor activities to keep you busy in Pangnirtung, including hiking, kayaking, and freestyle skiing.

When it comes to somewhere you can put your head down, there are a couple of pleasant hotels nearby as well as a few camping sites in the nearby Auyuittuq National Park. You can make the most of the local amenities while also being able to be at one with nature, making it a great place to visit.

6. Sable Island National Park Reserve, Nova Scotia

Sable Island is a small island located off the coast of Nova Scotia, which is home to some of Canada’s most beautiful beaches. The island is also home to a large colony of wild horses roaming freely across the sand dunes. There are no cars allowed on Sable Island, so it’s a great place to relax and unwind away from the hustle and bustle of everyday life!

When it comes time to find somewhere accommodation-wise, there’s only one option available on Sable Island itself. That being said, there are a lot more choices for you in nearby Halifax, where you can stay before taking the ferry over to the island.

 

Continue Reading

Also Interesting

Distorted beliefs about luck, skills and gaming knowledge, and their impact on gambling behavior

Published on

Recreational and problem gamblers alike hold some irrational beliefs about gambling. Erroneous gambling related beliefs (EGRBs) imply beliefs in luck and skills, and illusion of control as players develop various winning strategies based on broader beliefs about the nature of randomness. Gamblers’ distorted beliefs of luck and skills result in problem gambling. People think that luck will change, and they will win their lost money back. However, each gambling event is independent of the previous one, like each toss of the coin is completely independent of the previous tosses. So, the odds in your 8 th bet will no more be in your favour simply because you lose the earlier seven bets. Over time, the more you risk, the more you lose.

In the context of online gambling, best online casinos Canada offers a variety of games to gamblers that can be accessed from anywhere. These include video slots, jackpots, table and card games, and sportsbooks. There are noticeably more online games than land-based games. No restrictions on bet admission lead to bigger jackpots for all players.

Video slots

Video slots like Gonzo’s Quest, Starburst, and Thunderstruck are among the most popular ones. Low volatility video games award small but frequent wins, while high volatility video games give a single, chunky win.

Jackpots

Jackpots like Powerball, Buffalo and Bonanza can be progressive, pooled, fixed or local, and have the highest reward that a video slot can pay.

Table and card games

Table and card games like blackjack, roulette and baccarat are skill-based games, and are found in different variants including Pai Gow and Red Dog.

Live games

Live games like poker, blackjack and baccarat are streamed and played live in full HD.

Sportsbook betting

Sportsbook betting, like soccer, baseball and basketball offers a live betting feature, so players can make wagers as the game unfolds.

Specialty titles

Specialty titles like Bingo, Keno and Wheel of Fortune are distinct and general.

Other beliefs and myths about gambling

Gambling will eventually pay off

Gamblers have a persistent belief that the next bet will pay, despite repeatedly losing the next bet. There is a delusional belief in the gambler that a stroke of luck is only a wager away, that results in gambling addiction. The belief that gambling will eventually pay despite losing a considerable about of money reinforces belief in gambling, and is the driving factor behind compulsive gambling.

Irrational belief in a big win

Those who are not addicted to gambling, they are clear when enough is enough. They walk away from their losses and get on with life. However, this does not happen with a compulsive gambler. They keep coming back with the irrational belief of an eventual big win.

I’m lucky, I almost won, and will make it this time

If you almost won, that doesn’t mean you are due for a real win. Future gambling outcomes are in no way influenced by the previous ones.

Playing multiple games increases the chances of winning

You may win more often by playing two slot machines or poker games at once, but you will have to spend more also. And remember, the more you play, the more are your chances of losing.

Betting on the same number will increase my odds

The outcomes of most games of chances, particularly lotteries and slot machines, are completely random, and cannot be altered, no matter what you do. Betting the same number each time won’t help you more than betting different numbers. No matter how many times you have betted for the number or how many people have betted on a particular number, the odds remain the same each time.

Loss Disguised as a Win (LDW)

Slot machines are programmed to promote problematic play, and win for the house. They operate on a principle called Loss Disguised as a Win (LDW) wherein the player is given a win of credits with a spin, which is fewer than the original wager. These frequent wins keep the player engaged, despite a net loss.

Gambler’s Fallacy or “Monte Carlo Fallacy”

Many people suffer from the “Gambler’s Fallacy” or “Monte Carlo Fallacy”, which is an erroneous belief that if something has happened a lot of times in the past, it will happen less in the future, and vice-versa. The fact is that each event is independent of the earlier outcomes. The odds of a head after 10 successive head tosses on the 11th toss remain 50:50, it is not affected anyway by earlier 10 consecutive head tosses. The same goes with gambling. Odds and chances are mathematical probabilities, and are not controlled in any way by metaphysical powers or luck.

It’s my lucky day

Simply because you feel that it’s your lucky day, it’s not that you are going to win. Needing money, or hoping to win, has absolutely no influence on the outcome of a game of chance.

Signs of problem gambling

Gambling becomes a problem when you have trouble stopping. Warning signs of problem gambling are:

 Feeling guilty or worried about gambling
 Gambling to win back lost money
 Borrowing money, selling things, and committing criminal acts to obtain money for gambling
 Experiencing extreme highs from wins, and extreme lows from losses

Financial implications of problem gambling

Financial troubles associated with problem gambling include reduced disposable income, financial insecurity, job loss, and increased debt.

Signs of financial problems include:

 Overdue and unpaid bills
Increased spending on credit cards
 Repeatedly borrowing money from friends and family
 Secretive about money problems
 Receiving calls from collection agencies

Gambling is not for making money, seek help if required

Gambling addiction results in problems that extend well beyond financial losses, such as relationship issues, career-related consequences, and social isolation. If you can afford it and play only for recreational purposes, not for making money, gambling isn’t really a problem. Remember that gambling is not a way to make money. If you have become addicted to gambling, seek the help of professionals with recovery, simply don’t rely on your will power. Because if you could do it with will power, you would have stopped it on your own before your life was devastated.

Continue Reading

Trending

X