Eric Nuttall, a senior portfolio manager at Ninepoint Partners, is bullish on oil prices, predicting a floor price of US$80 even after the Strait of Hormuz reopens. Nuttall's optimism stems from the expectation that global inventories will need to be replenished after nearly four months of Middle Eastern conflict, leading to sustained demand for crude oil. The Strait of Hormuz, a critical shipping route for approximately one-fifth of the world's crude supply, has been effectively closed since the U.S. and Israel's attacks on Iran in late February. A recent interim agreement between the U.S. and Iran suggests that Iran will resume oil exports without restrictions, which could impact global oil markets. Despite this, Nuttall believes that oil prices won't drop to pre-war levels anytime soon. He highlights a significant market misconception: oil and gas equities have not fully reflected the energy price rally. Nuttall argues that stocks are undervaluing the potential floor price of US$80 WTI, emphasizing the potential for significant free cash flow and investor returns at this level. This perspective raises important questions about the future of the oil industry and the potential impact on global energy markets.
