Oil facing ‘epic’ volatility, how to break the noise

Eric Nuttall: Oil facing ‘epic’ volatility, how to break through the noiseYoutube

As the headlines about the energy crisis pick up steam, the oil market faces “epic” volatility.

That’s according to Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners. He told Investing News Network that it’s more important than ever for investors to break through the industry noise.

“Inventories are my BS detector – they are the link between supply and demand, and if stocks go down it tells me the market is undersupplied,” he said, adding: “It’s is really what I focus on.”

Nuttall is bullish on oil demand even as recession fears become more lingering, but he said the real story is supply, which he sees as coming from three main baskets: U.S. shale, Organization of the Petroleum Exporting Countries (OPEC) and “supermajors”, which are major global oil companies.

In a previous interview, Nuttall said that OPEC’s spare capacity depletion would be an extremely bullish catalyst for oil, and he now believes the group is nearing that point.

At the same time, he doesn’t see U.S. shale supply rising to its previous high levels, nor does he see global supermajors rushing to increase production.

“And so we are bullish on oil, not really because of demand – although we think demand will increase – but because shale growth in the United States is capped at around 600,000 to 700,000 barrels per year. day,” Nuttall said.

“OPEC – we think they’re running out of capacity, maybe they’ve got a million barrels a day. But if they don’t want to do that unless there’s an event massive geopolitics, it’s kind of the same anyway,” he continued.

“And then the global supermajors can’t grow. So it’s that mismatch between supply growth and demand growth that we’re excited about.” Watch the interview above to learn more from Nuttall on the oil outlook.

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Securities Disclosure: I, Charlotte McLeod, have no direct investment interests in any of the companies mentioned in this article.

Editorial Disclosure: JInvesting News Network does not guarantee the accuracy or completeness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the views of Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.