Energy at the Start of a Long Road Back

Energy at the Start of a Long Road Back

Mark Schoeffel / 22 January 2026

In a recent online presentation hosted by Ninepoint Partners, Portfolio Manager Eric Nuttall laid out a detailed and conviction driven case for why he believes the global energy sector is still in the early stages of a multi year bull market. His message was not framed around short term price movements or quarterly forecasts, but instead focused on deep structural changes that are reshaping oil and natural gas markets for years, and potentially decades, to come.

At the heart of the discussion was the idea that energy remains one of the most misunderstood and under owned segments of the global equity market. Despite several years of strong performance, energy stocks still represent a very small portion of major equity indices and institutional portfolios. Nuttall argued that this lack of ownership is not accidental. It is the result of years of capital flight driven by ESG narratives, policy missteps, and a widely accepted belief that the world was on the verge of rapidly moving away from hydrocarbons. In his view, those assumptions are now colliding with physical and economic reality.

A central pillar of Ninepoint’s outlook is the belief that United States shale oil production has reached its practical peak. For more than a decade, shale was the single largest source of incremental global oil supply. It masked underlying decline rates elsewhere in the world and created a sense that oil was abundant, cheap, and easily scalable. According to Nuttall, that era is ending. Geological limits, declining well productivity, and capital discipline have combined to halt meaningful growth in shale output. Whether production plateaus or begins to decline is almost beside the point. What matters is that the world has lost its most flexible and responsive source of new supply.

At the same time, global investment in traditional oil and gas exploration has fallen dramatically. Large producers curtailed spending for years, often under pressure to redirect capital toward renewable energy projects that have delivered poor economic returns. The result is a global reserve base that has been steadily eroding. Outside of Canada’s oil sands, many publicly listed companies now hold fewer years of proven reserves than at any point in modern history. Nuttall described this as a slow moving supply problem that cannot be fixed quickly, even with higher prices.

OPEC’s role in this environment is often misunderstood. While headline figures frequently suggest that the cartel holds massive spare capacity, Ninepoint believes those numbers are overstated. When inventory barrels and theoretical capacity are stripped out, the amount of oil that can be brought to market quickly is far smaller than commonly assumed. In a world consuming over one hundred million barrels per day, true spare capacity measured in low single digit millions leaves little margin for error.

Demand, meanwhile, continues to grow. Even organizations that have historically been pessimistic about fossil fuels now acknowledge that global oil consumption is likely to increase for decades. Emerging markets continue to industrialize, energy affordability remains a political priority, and alternatives have not scaled in a way that meaningfully displaces oil. Nuttall posed a simple question that recurred throughout the presentation. If demand keeps rising and supply growth is structurally constrained, where will the next barrels come from.

Natural gas featured just as prominently in the discussion. Here the story is less about depletion and more about surging demand. Liquefied natural gas exports from North America are expanding rapidly as countries seek reliable and cleaner alternatives to coal. At the same time, electricity consumption is rising due to data centers, electrification, and artificial intelligence related infrastructure. Ninepoint believes the marginal cost of supplying natural gas is higher than current market prices, creating an attractive setup where investors are effectively paid to wait for normalization.

Geography also matters in Ninepoint’s framework. For oil, Canada is viewed as one of the most attractive jurisdictions in the world. Its reserves are vast, long lived, and governed by rule of law. For natural gas, the United States offers superior access to end markets and export infrastructure. These preferences are reflected in how the firm constructs its portfolios, emphasizing companies with decades of inventory, strong free cash flow, and the ability to return capital to shareholders even at conservative commodity prices.

The presentation also addressed Ninepoint’s Energy Income Fund, which recently increased its distribution. Nuttall explained that the higher payout is supported by a combination of modest leverage and a more active options strategy, rather than by aggressive return of capital. The goal, he said, was to create a more competitive income solution while preserving long term upside.

During the question and answer session, Nuttall was careful not to promise repeat performance or near term price targets. Instead, he emphasized scenario analysis and valuation. Many of the companies Ninepoint owns appear reasonably priced or undervalued even at current oil and gas prices. If prices rise meaningfully over time, the upside could be substantial. He also pushed back on fears of massive inventory builds and sudden supply relief from countries like Venezuela, describing those narratives as overstated and disconnected from on the ground realities.

The overarching message was clear. Energy is not in terminal decline. It is in the midst of a prolonged expansion that has been delayed and distorted by years of underinvestment and policy driven optimism about alternatives. For investors willing to look past sentiment and focus on fundamentals, Nuttall believes the opportunity set in oil and natural gas remains unusually compelling.

This blog entry is based on an online presentation delivered by representatives of Ninepoint Partners, including comments and opinions expressed by Portfolio Manager Eric Nuttall. The views summarized herein are those of the presenter as of the date of the event and are subject to change without notice. They do not necessarily reflect the views or opinions of Mark Schoeffel, iA Private Wealth Inc., or affiliated firm.

The information discussed is provided for general informational purposes only and is not intended as investment, tax, or legal advice. References to specific securities, asset classes, sectors, or investment strategies are for illustrative purposes and do not constitute a recommendation, solicitation, or offer to buy or sell any security. Past performance is not indicative of future results, and there can be no assurance that any investment objective will be achieved.

Forward looking statements, including expectations regarding commodity prices, market conditions, portfolio positioning, or economic outcomes, are inherently subject to risks, uncertainties, and assumptions that may cause actual results to differ materially from those expressed or implied. Investors should carefully consider their own financial circumstances, objectives, and risk tolerance, and consult with their investment advisor before making any investment decisions.