In a week where oil markets were rattled by geopolitical upheaval, portfolio shifts, and speculative frenzy, Eric Nuttall, Senior Portfolio Manager at Ninepoint Partners, delivers a reality-check steeped in data, history, and plain sense. His latest energy update1, recorded on January 8, 2026, cuts through the noise surrounding Venezuela’s oil, Trump’s energy policy ambitions, and the recent plunge in Canadian oil equities.
While many hedge funds have suddenly become “Venezuelan oil experts,” Nuttall is skeptical of the consensus. “Every US hedge fund has become a Venezuelan oil expert and has come to the conclusion that Canadian oil is doomed. We’re taking the opposite view”.
Let’s unpack his reasoning.
Backdrop: Geopolitics Sparks a Panic
The update begins with a brief rundown of a volatile start to the year: U.S.-backed regime change in Venezuela, oil tanker seizures, and the sharp selloff in Canadian oil equities. As Nuttall describes it, the market reaction felt like déjà vu: “There was kind of like the fog of war. It took time for reality to set in. I think that’s exactly what we’re seeing today”.
The new narrative, Nuttall explains, suggests that with U.S. influence over Venezuela, there will be a surge in oil supply, refineries will get cheap feedstock, and Canadian oil will be left out in the cold. This belief sparked a bifurcated reaction in the markets: “Companies like Chevron rallied pretty strong... the Halliburtons and Schlumberger’s rallied by about 10%... and the Canadian heavy producers fell anywhere from 6 to 10%”.
But is that reaction justified?
“Profound Ignorance”: The Venezuela Infrastructure Problem
Nuttall gets right to the point: “There’s a profound level of ignorance” in assuming Venezuela can quickly ramp up production. He references a Financial Times article backed by Kayrros satellite imagery and previous leaks from Venezuela’s state oil company, PDVSA, painting a grim picture of crumbling infrastructure, massive environmental damage, and systemic underinvestment.
“In 2021... the necessary investment was pegged at about $58 billion. The Financial Times is suggesting that number is probably closer to $100 billion. That’s just the pipeline network,” Nuttall warns.
That doesn't include rebuilding power generation, oil storage, well integrity, or governance structures. “Imagine investing... and then you get a government change... and you lose all of your money all over again.” Not to mention $20 billion in outstanding legal claims from past asset seizures.
In Nuttall’s assessment, bringing Venezuelan oil meaningfully back online isn’t a matter of months — “that time is likely 7 to 10 years or longer” and will require “$90 to $100 billion” in capex.
Trump’s Oil Price Ambition: A Double-Edged Sword
Another headwind to higher oil investment? Trump himself.
Reportedly targeting $50 oil to boost his approval ratings ahead of the 2026 midterms, Trump is leaning on a tried political strategy: cheap gasoline equals better polling. But this presents a paradox, Nuttall explains.
“We are now, you know, $50 oil — any price in the 50s — this is the death zone for oil production,” he states bluntly. "There is no oil production growth at the current oil price, let alone at $50."
And the idea that producers will increase investment simply because Trump asks them? “Complete idiocy,” says Nuttall. “That argument is being taken in isolation, without recognition of the realities of 2026 energy aspects”.
2026: Peak Year for Non-OPEC Oil Production
Zooming out, Nuttall lays out what he sees as a historic inflection point in oil supply:
“This is the last year of non-OPEC producers in totality being able to add new volumes... With the twilight of US shale... non-OPEC supply is peaking this year”.
Even the International Energy Agency — “the biggest bears on the planet” — expects demand to grow until 2050. In January alone, early stats show demand up 1.2 million barrels per day. Meanwhile, spare capacity from OPEC is just 1.4 million barrels.
In Nuttall’s view, even if Venezuela eventually adds 1–2 million barrels per day, that won’t arrive for at least a decade. “The world very, very much is going to be desperately needing every single barrel that Venezuela can produce in that time frame”.
Valuation Amid Panic: A Contrarian’s Playground
For investors, the market panic has created what Nuttall sees as golden opportunities — particularly in Canadian energy.
“Just this week we’ve been adding to an existing position... a mid-cap Canadian oil sand company... Stock’s now down 19%. We think we’re buying it at about 5.4 times 2027 cash flow at $60 oil,” he says.
If oil prices go to $70?
“They can buy back 50% of their shares outstanding over the next five years out of free cash flow while also growing their production”.
That kind of math — 75 years of reserves, steady production growth, and the potential to halve outstanding shares — represents what Nuttall calls “the gift” of panic-selling markets.
Conclusion: Fog, Facts, and Fundamentals
Eric Nuttall doesn’t see a market in crisis. He sees a market in confusion — driven by speculation, headline-chasing, and flawed assumptions. His take is clear:
- Venezuela won’t save the world from high oil prices.
- Trump’s energy agenda is more political theatre than production plan.
- Canadian energy is undervalued and unfairly punished.
- We’re at the dawn of a multi-year bull market for oil.
As he reminds listeners:
“We’re much more bullish on oil as we get through the temporary surplus of the first half of this year and as the world looks beyond that to either the second half of 2026 or 2027”.
The fog of war may cloud vision in the short term — but fundamentals always win out in the long run.
Footnote:
1 Nuttall, Eric “Ninepoint Energy Market Update - 1.8.2026 | Ninepoint Partners LP." Ninepoint Partners LP, 12 Jan. 2026.
