Oil and gas watchers are bullish on Suncor’s future after an earnings beat in its most recent quarter and a plan for cost cutting in the future.

On Wednesday, the Canadian energy company reported profits of $1.54 billion for its third quarter, compared to a loss of $609 million a year ago.

Randy Ollenberger, managing director of oil and gas equity research at BMO Capital Markets, said the financials are great, but Suncor’s plan to cut costs with leadership operational changes paint a rosy future for the firm.

“One of the knocks against Suncor, (it has) the highest cost structure among their peer groups,” Ollenberger told BNN Bloomberg in a television interview on Thursday.

“The company’s on the right track here and we’re expecting them to deliver continuous improvements over the next several quarters.”

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, has been consistently bullish on oil and has a rosy outlook for Canadian energy, calling the industry “phenomenal.”

Nuttall pointed to Suncor’s earnings beat and the Trans Mountain pipeline expected completion in March promises to help the sector.

“You'll have differential for Canadian crude collapsing and staying low and less volatile for the next several years,” he said.

Nuttall also applauded Crescent Point’s recent $2.05-billion merger with Hammerhead even though its stock has fallen since the news was announced.

“When you look at the merits of the deal, they've added five years onto their inventory,” Nuttall said. “They've increased how much they're going to pay us by 11 per cent next year and they've made themselves a better company, not a worse company. So it's just short term noise that we've got to deal with.”

OIL SELL-OFF A MYSTERY

While the outlook for the Canadian energy sector might be rosy, the global oil industry is in flux.

Oil prices fell to US$76 a barrel as of Thursday afternoon as the economy eyes a recession, particularly in China, a key oil consumer for exporters.

Nuttall said that the recent dip has experts confused, as conflict in the Middle East typically raises prices.

“When you had an implosion sharp sell-off, it takes a couple of weeks to figure it out, but we cannot identify the reasoning,” he said in the television interview on Thursday. “We get access to some pretty interesting people to chat with (and) nobody can explain the sell-off in the past week and week and a half.”

Nuttall said demand for oil remains high at the consumer level and noted supply has grown more than expected.

Pierre Andurand, founder of Andurand Capital Management, believes this growing supply is part of the price dip, as both the U.S. and Iran produced more oil than expected.

“We have had a lot less supply disruptions than in an average year,” he posted on the social media platform X.

Meanwhile, Ollenberger said the changes in oil prices should not be a concern to Suncor investors.

“The near-term gyrations in oil prices really don’t influence that thought process that much,” he said.

With files from Bloomberg News