Canadian Natural Resources (TSX: CNQ) has been on a downward trend since the spring of 2024. Buy-and-hold contrarian investors are wondering if CNQ stock is now oversold and good to buy for a self-directed Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) portfolio focused on dividends and total returns.
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The oil market
West Texas Intermediate (WTI) oil trades near US$67 per barrel at the time of writing. This is above the 2025 low around US$57 in May, but still well off the US$80 it fetched in 2024. Volatility in recent months has occurred as a result of uncertainty due to U.S. tariffs and geopolitical tensions.
Price spikes caused by unrest in the Middle East tend to be short-lived. Nimble traders of energy stocks have been able to make some quick money on the events, but the fundamentals over the past year are the main story and that is why oil prices have trended lower.
Weak demand in China and rising output from non-OPEC producers, including the United States and Canada, led to the decline in oil prices last year. In 2025, traders are concerned that U.S. tariffs will lead to a recession in both the United States and the global economy. At the same time, OPEC plans to increase supply in a bid to recover some lost market share. Assuming there isn’t a major supply disruption, oil prices will likely face headwinds through the end of the year and into 2026.
Canadian Natural Resources stock
CNRL trades near $43.50 at the time of writing. The stock was as high as $55 last year, but is above the $35 it fell to in April during the tariff crash.
Investors should largely ignore the day-to-day noise in the market. Even at current oil prices, CNRL remains very profitable. Management says the company’s WTI breakeven price is roughly US$40 to US$45 per barrel.
CNRL owns assets across the hydrocarbon spectrum. Its large oil sands operations are widely known, but CNRL also has conventional heavy oil, conventional light oil, offshore oil, natural gas liquids, and natural gas production and reserves.
The natural gas side of the business helps provide a hedge against weaker oil prices, as it sometimes rises in price when oil declines. Demand and pricing for Canadian natural gas could surge in the coming years as new liquefied natural gas (LNG) export facilities are completed. The LNG Canada project, for example, is now in commercial operation. Other facilities are under construction on the coast of British Columbia.
The recent push to reduce reliance on the United States for energy sales could lead to new gas pipelines and a new LNG export facility connecting producers to the Atlantic. New oil infrastructure could also get built to move crude oil to the three Canadian coasts to access more international buyers. All of this would benefit CNRL.
Dividends
CNRL raised its dividend in each of the past 25 years. Revenue and profits should continue to grow as production expands due to acquisitions and drilling programs. Investors who buy the stock at the current level can get a dividend yield of 5.4%.
The bottom line
Near-term volatility is expected and energy prices could remain under pressure over the coming months. That being said, CNQ stock already looks attractive at this price and investors get paid well to ride out the turbulence. If you are an energy bull and have some cash to put to work, this stock deserves to be on your radar.
