A distant secondary consideration to the human tragedy unfolding in Fort McMurray is the impact to the oil sands' energy output and the operations of its biggest producers.
The wildfires have forced nearly 40 per cent of the region's production off line, according to estimates. But once the flames are extinguished and the damage to energy infrastructure can be assessed, the energy sector itself will likely not have to contend with much more than a temporary disruption, according to RBC Dominion Securities.
"From where we sit, we would be buying oil sands producers on weakness caused by the wildfires, recognizing that while operational risk still exists, it is essentially tantamount to an unplanned outage that should come out in the wash once second-quarter results are released," RBC's energy analysts said in a note.
As the fires quickly advanced on Fort McMurray, forcing the evacuation of a city of more than 80,000 people, several large producers opted for partial or complete shutdowns. Up to 1 million barrels per day of production capacity was taken off line, which amounts to about 38 per cent of the oil sands' outlook of 2.6 million barrels per day, RBC said.
Several pipelines were also shut down, "out of an abundance of caution," the note said.
"Unless the fires spread, the pipeline infrastructure should be ready to deliver diluent into the Fort McMurray region – and receive oil once the fire situation has been definitively extinguished, and safety inspections have occurred. Power infrastructure – critical to the oil sands, will also need to be inspected for damage."
So far, the biggest oil sands stocks have not been subjected to much in the way of a correlated selloff, but any share price declines would provide buying opportunities in stocks that RBC rates as outperformers: Canadian Natural Resources Ltd., Cenovus Energy Inc., Suncor Energy Inc., Husky Energy Inc., and MEG Energy Corp.