Investment Q&A

Gas demand is highly dependent on the economy, and we have seen the consumer sector struggle of late. Refiners are more tied to volume than pricing, but of course higher gas prices result in less demand overall. But lower gas prices do not always result in higher volume. Thus, refiners are a harder call. But they are priced very well already, and a recession we do not think would hurt them so much considering it is largely priced in already. Producers of course, see a more direct impact from lower prices, and recent weakness and OPEC moves potentially set up a fairly weak price deck for the next six months. But again, valuations are so low and balance sheets so strong, that investors may just be willing to ride out things until better times emerge. So, to sum up, we think the sector is still relatively attractive, but not at the same weighting as the TSX (18%).