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Image source: Getty Images Canadian oil and gas stocks have been strong performers in 2022. The S&P/TSX Capped Energy Index is up 47% so far this year. That is compared to the broader TSX Index , which is actually down 8.3% year to date. Despite the strong performance, oil prices have declined 25% since highs made earlier in June. The good news is that many Canadian oil stocks have held up relatively well. This baseline could indicate that these stocks are ready to rally another leg further. Here is why. Canadian oil stocks could rally again in 2022 and 2023 Firstly, Canadian oil stocks have cleaned up operationally and financially. Years of low oil prices have forced them to reduce costs and maximize operating efficiency. With oil suddenly shooting to +US$100 per barrel, most oil stocks are earning large amounts of surplus cash. This cash has been used to reduce debt levels to long-term, sustainable levels. Secondly, oil prices could remain elevated for some time to come. Global oil and gas production capacity has not kept up with rising demand in the past several years. The sector has not invested in production growth as in past cycles. Consequently, a […]
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