Vermilion Energy and Advantage Energy were among the weakest stocks on the S&P/TSX Composite on Monday, November 9, as crude prices tumbled. Oil fell after U.S. President Donald Trump said further attacks on Iran were unlikely if peace talks progressed, and energy was one of the few sectors to finish lower on a strong day for Canadian stocks. Neither company issued fresh news on Monday; both reported quarterly results in the past two weeks.

What happened

Vermilion Energy (TSX:VET) closed at $14.41, down 37 cents. Advantage Energy (TSX:AAV) ended at $10.33, down 23 cents. Both sat on the list of the Composite's sharpest decliners for the session.

The broader market moved the other way. The S&P/TSX Composite rose about 657 points to close at 36,446.26, its highest finish since early September. Base metals led, and advancers outnumbered decliners by more than two to one.

Energy was the outlier. December West Texas Intermediate crude fell to US$86.92 a barrel and January Brent dropped to US$92.65. Traders cut the risk premium that had built up around the Middle East once Washington signalled that more strikes on Iran were not in the cards if diplomacy moved forward.

Why it matters

Vermilion is the more oil-sensitive of the pair. It produces oil and gas in Canada, the United States, Europe and Australia, and much of its Cash Flow tracks global crude and European gas prices. On November 4, it reported third-quarter fund flows from operations of $237 million and free cash flow of more than $90 million. Production averaged about 117,350 barrels of oil equivalent a day.

The company also released a 2027 Capital budget of $675 million to $725 million, with production guidance of 122,000 to 126,000 barrels of oil equivalent a day. It plans to lift its quarterly Dividend to 14 cents from 13.5 cents starting in early 2027, subject to board approval. Net Debt stood at $1.17 billion at the end of September.

Advantage is mainly a Natural Gas producer in Alberta's Montney region, with a smaller stream of oil and liquids. Its third-quarter results, released October 29, showed output of about 87,000 barrels of oil equivalent a day, lifted by its new Progress gas plant. Adjusted funds flow was $96.8 million, and free cash flow came in at $35.9 million.

The sale of its Wembley Assets brought in $325.4 million and cut net debt to $233.0 million. Advantage says it directs all free cash flow to share buybacks.

The bigger picture

Monday's selling looks like a sector move, not a verdict on either company. When crude drops sharply, investors tend to sell the whole group first and sort out the differences later. Producers with more oil exposure usually feel it most, which fits Vermilion's slightly bigger drop.

Falling oil also helped the rest of the market. Lower energy prices eased Inflation worries, which supported rate-sensitive stocks and pushed Canadian bond yields down. That shift pulled money toward miners, industrials and banks and away from oil producers.

What to watch next

The key variable is the Middle East. Any sign that U.S.-Iran talks are stalling could quickly restore some of the risk premium that came out of crude on Monday. Steady progress could keep prices under pressure.

For Advantage, the next company milestones are its formal 2027 budget and updated three-year plan, along with early results from two new Progress wells, all expected in early December. For Vermilion, investors will watch how its 2027 spending plan holds up if oil stays near current levels, and whether European gas prices give it support.