- Cenovus reached an agreement to buy fellow Canadian oil sands producer Husky Energy.
- With the transaction, Cenovus doubles-down on oil sands production (bad) while achieving additional refining and pipeline exit capacity (good).
- The problem is that the pandemic has put North America refining into a state of depression, especially for distillate refining due to jet-fuel demand destruction.
- While the longer-term outlook for this combination makes strategic sense, there is no need for investors to rush into this duo.
For further details see:
Cenovus & Husky: It's Dog Eat Dog