After a quiet summer, Eric Nuttall of Ninepoint Partners returned with back-to-back updates on September 4 1 and September 11 2, laying out why oil investors should brace for a bumpy autumn but stay focused on the bigger prize ahead. His message is clear: short-term softness is possible, but the long-term setup for energy equities—especially Canadian names—remains exceptionally bullish.
Bulls, Bears, and the Near-Term Oil Debate
Nuttall opens the September 4th update by framing the tug-of-war in oil markets:
“There’s a real debate raging between the Bulls and the Bears for the outlook for oil prices over the short term.”
Bulls argue inventories are tight and refining margins remain strong. But Nuttall cautions that OPEC’s supposed 2.2 million barrels per day return is mostly smoke and mirrors:
“While the headline is 2.2 million barrels per day, in reality it’s closer to about 1.1 to 1.2 million barrels per day.”
Saudi exports dipped in August—partly to keep air conditioners humming in scorching heat—but he said shipments should rebound in September by roughly 436,000 barrels per day. Meanwhile, new supply from Brazil, Guyana, and Canada is coming online just as China’s stockpiling capacity nears its limit. That means inventories in OECD countries will likely rise, weighing on prices in the short term.
OPEC’s Spare Capacity: From Buffer to Risk
For decades, OPEC’s spare capacity has been the market’s safety net. Now, that cushion is substantially thinner.
“OPEC’s spare capacity as of now… we measure at 2.1 million barrels per day. Global demand today is about 106 million barrels per day. And so our definition of that is, well, that’s normalized. That’s a very thin safety buffer.”
Nuttall warns that OPEC may unwind another deal that was supposed to last until 2026:
“OPEC is not just unwinding prior deals, but fully unwinding their actual real spare capacity. That’s the safety buffer, the shock absorber to any actual supply interruption. That would be a wildly bullish development over the medium term.”
Why take such a risk? He points to resentment within OPEC about the huge cost of maintaining spare capacity while being criticized abroad:
“Countries take for granted the cost to maintain spare capacity. It’s just, it’s enormous… why bother? Especially when there’s other much more important domestic spending priorities.”
By mid-2026, he believes OPEC could be fully tapped out. Combine that with U.S. shale flattening and non-OPEC growth peaking, and the world will be dangerously exposed to even modest disruptions.
Investor Sentiment and the IEA’s Role
Despite strong balance sheets and cash flow, energy stocks remain unloved. Nuttall puts part of the blame squarely on the IEA:
“The reason why sentiment remains as depressed as it is, I think one of the largest reasons has been one key source and that is the IEA.”
For years, the agency has forecast peak oil demand by 2030. Nuttall counters bluntly:
“The fear of peak demand will result in the reality of peak supply.”
Now, he says, the IEA may be reversing course, with reports suggesting oil demand could grow to 114 million barrels per day by 2050. For Nuttall, that could be “the holy grail” that finally shifts sentiment.
Canada’s Role and Company Discipline
Nuttall repeatedly emphasizes Canada’s unique position.
“Canada is going to be the bastion of fund flows for investments. We have the highest quality reserves arguably in the world. Very long duration measured in decades.”
He cites a Peters & Co. report showing Canada dominates North America’s top plays for profitability and payback times:
“Roughly in the top 10 plays in North America, Canada has eight of them.”
On top of resource quality, Canadian producers have strengthened balance sheets:
“Our companies have delevered significantly. And so we see a strategic value one day being placed on those.”
Perhaps most importantly, he sees a cultural shift among executives. Growth-at-all-costs is out, capital discipline is in:
“For the very first time, they said, look, you know, we agree now we’re going to go from production growth to cash flow per share growth… just buy back your shares and you improve production per share.”
Many companies can now pay dividends of 8% even at $50 oil for decades to come. That combination of quality reserves, disciplined management, and resilient free cash flow makes Canada a standout in a world facing chronic underinvestment.
Natural Gas: From Summer Weakness to Future Tightness
This summer’s unusually cool weather weighed on natural gas prices, but Nuttall sees that as temporary. With LNG projects set to add nearly 4 bcf/day of demand by 2026, he believes today’s valuations are attractive.
“Even though if we have a normal winter for weather, given the build out in LNG projects… you could rapidly erode the storage surplus in natural gas inventories leading to a price spike.”
Conclusion: Pause Today, Opportunity Tomorrow
Nuttall’s bottom line is consistent: short-term softness is possible, but the structural story is getting stronger. U.S. shale is fading, OPEC’s buffer is nearly gone, and demand isn’t going anywhere.
“We think that there is cause for pause over the very short term in oil, but remain very, very bullish on oil stocks, especially those in Canada.”
Footnotes:
1 "Ninepoint Energy Market Update - 9.4.2025 | Ninepoint Partners LP." Ninepoint Partners LP, 4 Sept. 2022.
2 "Ninepoint Energy Market Update - 9.11.2025 | Ninepoint Partners LP." Ninepoint Partners LP, 11 Sept. 2022.
