He counters this by noting predictions from the International Energy Agency, which suggest that oil demand will peak later this decade.
Secondly, Nuttall addresses concerns about surging US shale production, which led to fears of market imbalance. He clarifies that corporate guidance indicates more modest growth rates going forward, suggesting that 2023 was an anomaly.
Thirdly, he discusses concerns related to OPEC+ and its market strategies. Despite successful market management, there is fear that US production growth could provoke OPEC+ to flood the market.
However, as of January 2024, Saudi Arabia’s Aramco announced a halt in plans to expand its oil production capacity, which could stabilize the market.
Nuttall remains bullish on the sector, particularly in Canada, citing companies like Veren Energy, Cenovus, and Baytex as promising. These companies have adopted strategies to moderate growth and maximize free cash flow, leading to significant share buybacks.