Feature Article

This is the second in our series of roundtable Q&A discussions focusing on Q1 results and guidance updates from management teams for 2021 and beyond. For more individual company analysis, see this issue’s Portfolio section.

Crestwood Equity Partners saw lower gathering and processing volumes at its systems in the Powder River Basin, Marcellus, Barnett and Delaware (Permian) shale basins in Q1, versus year ago levels. Nonetheless, EBITDA rose by 9 percent and distributable cash flow surged 15 percent.

Over the next few weeks, the energy sector will report Q1 results and management teams will update guidance for 2021 and beyond. At stake is whether individual companies are holding up at this stage of the energy price cycle.

Our recommended stocks’ Q4 numbers and guidance were spread out over a couple months. In contrast, their Q1 results will come in as basically a data deluge.

It’s been almost two years since we published a major feature piece on Canada’s energy sector: A Q&A that focused on Australian companies as well. And over that time, much of our coverage universe in both countries of producers, drillers, midstream service providers and even downstream companies have rated sells.

In the feature article of our last issue, “The View from $60 Plus Oil,” we outlined our constructive outlook for crude oil prices based on three primary drivers: Recovering global demand, continued supply discipline from OPEC+ and restrained growth from the US shale producers.

For months now we’ve held a constructive outlook for crude oil prices and energy stocks that’s based on three primary drivers. First, there’s an ongoing recovery in global oil demand from last year’s economic lockdowns and travel restrictions that we expect to accelerate as coronavirus vaccines are rolled out more widely in 2021.