Energy stocks in Canada ‘decoupling’ from oil seen as worst-ever on record

Bloomberg

The days when energy stocks and price of oil moved in lockstep are now few and far between. Oil may go up but stocks still fall, and in Canada it’s the worst divergence on record.
The ratio of the iShares S&P/TSX Capped Energy Index ETF to West Texas Intermediate crude oil is at an all-time low, according to data compiled by Bloomberg.
And the so-called decoupling of energy shares from the price of WTI crude has hit Canadian stocks harder than their US counterparts. Unlike in Canada, while the ratio between the iShares US Energy ETF and WTI has dropped, it’s nowhere near a record low.
Crude gained about 20% this year despite continued macroeconomic volatility, while Canadian energy ETF slumped more than 10%. The US energy ETF slipped about 2%.
Pipeline constraints, regulatory headwinds and lackluster interest in oil-sands companies are the main reasons for Canada’s slump, said TD Securities Inc. analysts.