Wall Street Veteran: A New Bullish Logic for Crude Oil

To those who harshly criticize my decision to take this position, I ask only one thing—watch the Canadian documentary *Over a Barrel*. Don’t worry—it’s not climate-change-denial propaganda. In fact, quite the opposite: the debate over oil sands may benefit oil majors more than you’d imagine. How to Trade? Even without supply constraints, I might still hold a bullish view on oil prices—but recent statements from the International Energy Agency (IEA) and similar policy decisions are merely the final strokes in this grand drama. Today, WTI futures hit a three-year high. Yes, prices have risen substantially—but to me, the current price action resembles the calm before a new surge. This presents a unique opportunity with an exceptionally attractive risk-reward ratio. Energy is now my largest sector holding. I’m already long crude oil futures, but today I purchased multiple long-dated crude oil futures contracts across different maturities. December is the most liquid contract month, so I’ve concentrated my main positions in December 2023 and later contracts. The CME offers various crude oil futures—including newly launched Micro WTI Crude Oil Futures. Due to their smaller contract size, micro futures are ideal for individual investors seeking leveraged exposure to crude oil price movements. Figure: CME Crude Oil & Gasoline Futures Product Specifications For non-futures investors, ETFs such as USO (United States Oil Fund) offer long exposure to crude oil. Typically, these ETFs hold front-month futures—and because of frequent roll-over requirements, their returns differ significantly from those of holding longer-dated futures. USO may indeed be suitable for many, but for higher-risk-tolerant investors, two-year LEAPS on USO—or two-year call options on WTI crude oil futures—may be worth considering. As shown in the chart below, the orange line represents the WTI implied volatility term structure—the at-the-money implied volatilities across futures expiries. This chart allows a simple comparison between near-term and longer-dated volatility, helping inform option expiry selection. Data limitations prevent us from observing two-year volatility directly—but based on the chart, one-year volatility isn’t meaningfully higher than that of front-month contracts. Thus, longer-dated options offer an appealing alternative without excessive term premium. Beyond crude oil futures, Canadian energy companies—including Suncor Energy (SU) and MEG Energy—are also compelling names. I favor SU for its vast oil sands portfolio plus substantial downstream operations. I like MEG because you simply can’t navigate this cycle without owning it. Husky attempted to acquire MEG several years ago, but shareholders demanded a higher price—and ultimately voted down the deal. We hoped Husky would return with a better offer—but it never did. Fortunately for us, MEG holds meaningful asset scale and remains a prime acquisition target for major oil companies urgently seeking growth opportunities. Finally, Typically, a commodity’s supply-demand fundamentals may look attractive—but macro conditions work against you, or government policy opposes your position. Now, however, macro conditions and industry fundamentals are aligned—a rare confluence. Crude oil benefits not only from favorable supply-demand dynamics, but also from supportive macro conditions and even climate-policy frameworks—like a warm chocolate chip cookie paired perfectly with cold milk and ice cream.

Deep Dive into Earnings: Li Ka-shing’s Canadian Oil Assets Revealed—Nearly 1 Million Barrels Per Day, Extraction Costs as Low as $30 per Barrel

2. 2021 Merger & Capacity Expansion: Husky Energy merged with Cenovus Energy, forming Canada’s third-largest oil company, producing approximately 750,000 barrels of oil equivalent (BOE) per day; the Li family holds 27%–29.4% of shares, making it the single largest shareholder. 3. 2025 Further Capacity Expansion: Cenovus acquired MEG Energy (a core Canadian oil sands asset) for ~US$5 billion, adding 110,000 barrels per day of low-cost oil sands production—lifting total output to nearly 1 million BOE per day. III. Scale & Value Comparison - Production Scale: Nearly 1 million BOE/day—exceeding the entire national daily output of the UK (~590,000 bpd), Malaysia (~480,000 bpd), and Brunei (~100,000 bpd); globally ranks among the top 20 oil-producing entities. - Revenue Estimate: At oil prices of US$80–100 per barrel, daily revenue reaches US$80–100 million, translating to annual revenue of ~US$2.9–3.65 billion (≈RMB 21–26 billion). - Profit Contribution: In 2025, CK Hutchison Holdings’ attributable net profit from Cenovus was HK$3.757 billion, with EBITDA of HK$9.851 billion—making it one of the group’s core profit pillars. IV. Key Clarifications 1. This is equity-controlled production—not direct extraction by Li Ka-shing personally. Cenovus Energy is a Canadian public company; the Li family is its largest shareholder, but does not own it outright. 2. Production consists primarily of Canadian oil sands crude—not light conventional crude. Extraction costs and quality differ significantly from Middle Eastern crude. 3. Data is reported in barrels of oil equivalent (BOE), including natural gas converted to oil-equivalent units; pure crude oil output is slightly below 1 million barrels per day. Cenovus Energy 2025 Key Data Summary Data Scope: Full-year/Year-end 2025, based on official financial reports + CK Hutchison’s 2025 earnings disclosure; Units: thousand BOE/day (MBOE/d), US$/bbl, CAD millions (C$MM) I. Shareholding Structure (Li Ka-shing Family / CK Hutchison Group) - Largest Single Shareholder: CK Hutchison Group (CK Hutchison Holdings + Li Ka-shing Family Trust) collectively holds 29.4% (as of end-2025) - CK Hutchison Holdings (00001.HK): 17.0% - Li Ka-shing Family Trust: 12.4% - Other Major Shareholders: Canadian pension funds, public funds, institutional investors (~45% combined); publicly traded shares ~25.6% - Control: The Li family holds absolute majority control as the single largest shareholder, guiding board composition and strategic direction II. 2025 Total Production Breakdown (Post-MEG Acquisition, Annual Average) Total Daily Production: 982,000 BOE/day (MBOE/d), approaching the 1-million-barrel target Upstream (Extraction): 916,000 BOE/day (93.3% of total) 1. Oil Sands (Core, Canada): 643,000 BOE/day (65.5%) - Foster Creek: 208,000 BOE/day - Christina Lake: 336,000 BOE/day - Sunrise: 54,000 BOE/day

Canada's Cenovus posts surge in profit as MEG acquisition spurs record output

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Cenovus Energy reported a record Q1 profit of C$1.57 billion, driven by higher crude prices and increased production from its MEG acquisition. The company also announced a 10% dividend increase alongside record upstream output levels.

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Canada's Cenovus posts surge in profit as MEG acquisition spurs record output

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