Oil prices have been virtually unstoppable over the last several months. The price of crude oil surged past the US$100-per-barrel mark before it became highly volatile. Oil prices began skyrocketing due to a rebound in energy demand that kicked off last year.
The lack of supply to match the demand led to a sudden uptick in energy prices, but another development has made matters worse.
Russia is one of the major oil producers worldwide. The country’s decision to invade Ukraine has resulted in several economic sanctions against the country that could impact global supplies. The uncertainty combined with rising demand could keep oil prices high for a long time.
A major oil producer practically moving out of the picture could significantly boost the Canadian energy industry to make up for the global shortfall. Due to the oil price hike, many TSX stocks have become ideal growth stocks for investors banking on their bullish rally.
Unless the Ukraine-Russia situation reaches a peaceful conclusion that results in the removal of sanctions against Russia, oil prices are unlikely to recede to more manageable levels. Canadian producers could ramp up production to enjoy more profits due to the situation.
Due to the current geopolitical situation, it might be costlier for you to fill up your gas tank. Still, you could use it to your advantage by investing in these two energy stocks that have already delivered stellar growth this year.
Suncor Energy (TSX:SU)(NYSE:SU) is a $60.11 billion market capitalization integrated energy company that specializes in producing synthetic crude oil through its oil sands operations. Headquartered in Calgary, it is Canada’s largest integrated energy company, and it generates substantial cash flows through several business verticals.
The strength of energy prices has been instrumental in its rebound over the last year. The company enjoyed improved profit margins, improved its liquidity position, and has a healthier balance sheet — all of it translating to a stellar performance on the TSX this year.
Suncor Energy stock trades for $41.89 per share at writing, and it boasts a juicy 4.01% dividend yield. Its share prices are up by 26.37% year to date.
Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ) is a $97.02 billion market capitalization giant in the Canadian oil and natural gas industry. Headquartered in Calgary, the company operates primarily in the Western Canadian provinces but boasts a few offshore operations as well.
It is the largest energy company by market cap, and it has cemented its place on top after a bull run due to strong oil prices. Canadian Natural Resources stock trades for $83.09 per share at writing, and it boasts a 3.61% dividend yield.
Its share prices are up by 51.90% year to date. Provided that the energy prices remain strong in the coming quarters, CNQ investors could see significant capital gains.
Stock market investing entails an inherent risk to your investment capital. Investing in growth stocks can deliver stellar shareholder returns. However, the potential for greater returns comes with a higher degree of capital risk. Canadian oil producers have been raking in profits due to elevated oil prices, but a drop in crude oil price could easily wipe off the gains in a matter of weeks until things stabilize.
If you are willing to assume the risk of investing in the energy sector right now, Suncor Energy stock and Canadian Natural Resources stock could be viable investments to consider.