The oil markets are once again driven by geopolitical matters. The renewed interest in the vulnerable oil production infrastructure and the threat of foreign investment are a reminder of the uncertainty that surrounds marginal sources of supply. Although such occurrences are newsworthy, they are seldom useful to the investment community. Capital moves to sources of sound production that can provide meaningful volumes of oil, generate cash flow regardless of price, and return the investment without fanfare.
This has played out in Cenovus Energy's (CVE) favor. It not only has strong heavy oil resources in the oil sands, but it also has a top-of-the-line refining business. Cenovus stands out in a sector where investors have come to pucker up and kiss the devil they know. The group now values consistency above speculation.
