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BNN: Commodities to benefit as long as the U.S. economy can hold up

Watch Sam LaBell on BNN Bloomberg as he explains why high, sticky inflation benefits commodities, foresees a stable period for oil, and picks Rogers Communications as a top investment in the communications sector.

Our Portfolio Manager, Sam LaBell, appeared on BNN Bloomberg with Andrew Bell to discuss how high, sticky inflation is good for commodities, provided the economy continues to hold up.*

“Ultimately, we think we’re entering a nice stable period for oil,” Sam said. “OPEC has signaled that they’re willing to reduce production. The main production growth is coming out of North America, but the costs of that production, especially in the Permian Basin, are going up. You’re looking at a breakeven cost in the low US$60s per barrel, so that puts a floor on where oil could go because that is the marginal supply.”**

That stability in the price of oil will allow Canadian oil sands companies to generate high free cash flows. Most of the oil sands companies have hit their debt targets, so they’re able to return those high cash flows to shareholders.

He also questioned the copper rally and explained why Rogers Communications Inc. (NYSE: RCI, TSX: RCI.b) is his top pick in a struggling communications services industry.

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