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That was long before prices hit rock bottom, as they did early this year.

The same reasoning can be applied to his decision to sell the Suncor position.

There is a perception Suncor’s valuation is ahead of itself; that it needs a ‘fancy’ oil price to justify where it’s trading. If you are a value investor, why not sell into the market if the stock is perceived as full valued, if not overvalued?

Buffett did not sell his position in downstream player Phillips 66, which suggests he sees more upside from the refining side of the business.

The move to sell Suncor at current valuations and hold onto Phillips 66 while putting his money to work in four U.S. airlines suggests Buffett has bought into the ‘lower for longer’ oil price scenario that benefits the downstream and users of refined products, such as the airlines, and puts higher-cost producers at a disadvantage.

That’s especially true for oilsands players whose cost structure is generally higher and are at the end of a pipe, far from markets.

In light of the recent U.S. election results, the issue of competitiveness has come under greater scrutiny.

The ability of Canada’s oilpatch to compete with American oil and gas producers has been further compromised, and even with a weaker Canadian dollar, there is much to fret about.

Topping the list is the simple fact that within six weeks, a carbon tax will go into effect in Alberta, which will boost the costs for Canadian players. Yet the cost structure of the barrels coming out of Texas isn’t changing, arguably putting Canadian production at a competitive disadvantage.