"Oil and natural gas companies raised $2.73 billion in equity in the first three months of the year, more than six times the same period of 2013, according to data compiled by Bloomberg. The financings were all secondary offerings and represent the most since the $3.37 billion to start 2011.
The outlook for energy brightened after Canadian gas prices rose to a 14-year high in February, during the coldest U.S. temperatures for that month in four years. U.S. President Barack Obama’s deliberations on whether to approve the $5.4 billion Keystone XL pipeline also are becoming less pressing as trains carry more oil, lifting heavy crude prices. A weaker Canadian dollar also promises to translate into fatter profits.
“There’s a general sense in the market that Canada’s not hostage to Keystone XL anymore,” said Mason Granger, a portfolio manager at Sentry Investments Inc. in Toronto, referring to the pipeline that would link oil-sands output from Alberta with U.S. Gulf Coast refineries. “We’re having some pretty good performance out of the stocks so far this year.”
Rising rail shipments of crude are helping Canadian producers skirt transportation bottlenecks amid delays for new pipelines, including TransCanada Corp.’s Keystone XL, and leading to higher prices of the nation’s heavy crude relative to the U.S. benchmark.
TransCanada Chief Executive Officer Russ Girling told analysts in February that by any criteria being used, “Keystone will be determined to be in the national interest of the United States,” according to a transcript of the remarks. TransCanada cannot predict when a decision will be made on Keystone XL, Davis Sheremata, a spokesman, said in an e-mail yesterday.
With oil and gas stocks outperforming U.S. peers and optimism around rail transport and alternative pipeline proposals, such as TransCanada’s Energy East line to Canada’s Atlantic Coast, investors may boost flows into energy funds, Sentry’s Granger said".
Source: Bloomberg
