Stock research: Suncor (TSX:SU) Stock Rally: Are Investors Too Optimistic?

Here is the article.

Here are highlights:

1. Suncor stock is up 60%
2. Suncor stock bottom is near $15 in March. I bought 20 share on March 27, 2020, $16.45
3. Analysts shared fact: Run out of storage capacity as the end of May
4. Crude oil price is $30 per barrel 
5. Breakeven price is above $30 dollars, 
6. More on step 5, $30 per barrel is high enough to keep more companies alive. 
7. Global economy will pick up momentum

A few things are new to me:

Storage capacity, when to run out of storage space, crude oil price, SU stock and its future in next 12 months. 

I need to think about how much I should invest on this oil stock. 100 share, at price of $25.67. 

Content I review: 

The share price of Suncor Energy (TSX:SU)(NYSE:SU) is up 60% since bottoming out near $15 in March. Investors who missed the bounce are wondering if this is a good time to buy the stock.

Oil price

The price of oil is steadily moving higher after a brutal plunge that saw WTI futures contracts briefly trade negative last month.

The drop in demand caused by pandemic lockdowns is as high as 30% according to some estimates. This happened at the same time that Saudi Arabia and Russia decided to end a pact to manage supply. The ensuing price war saw the two countries open up the taps, adding to the oversupply in the market.

At one point, analysts feared the world would run out of storage capacity as early as the end of May.

After oil plunged to levels nobody expected, Saudi-led OPEC and Russia agreed to cut nearly 10 million barrels per day from the market beginning May 1. The move, in addition to reduced production by struggling oil companies, is combining with a slow rebound in global demand to prop up prices.

WTI oil now trades above US$30 per barrel. That’s still below the breakeven price for many oil producers, but high enough to slow cash burn and keep more companies alive until the global economy picks up momentum.