A prominent Canadian investment manager is sounding the alarm for a major spike in global oil prices, predicting a sharp upward turn as soon as the coming year. Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, has warned that markets should brace for 'dramatically higher' oil prices in 2026.
The Core of the Forecast: A Looming Supply Crunch
In a recent discussion with the Financial Post, Nuttall laid out a compelling case for the impending price surge. His analysis hinges on a fundamental mismatch in the energy sector: years of persistent underinvestment in new oil production and exploration are set to collide with steady, if not growing, global demand. This chronic lack of capital expenditure, he argues, has set the stage for a significant supply shortfall that will become acutely apparent, driving prices upward.
The warning is not about minor fluctuations but a structural shift. Nuttall believes the current investment climate, shaped by environmental, social, and governance (ESG) pressures and policy uncertainty, has severely constrained the industry's ability to bring new supply online to meet future needs. This creates a tangible risk of a supply squeeze that the market has yet to fully price in.
Implications for Canada's Energy Sector
For Canada's oil industry, this forecast carries substantial weight. A sustained period of higher commodity prices would directly benefit domestic producers, potentially boosting corporate revenues, government royalties, and overall economic activity in energy-rich provinces like Alberta and Saskatchewan. It could also reinvigorate investment in the sector, though likely within a continued framework of capital discipline and a focus on shareholder returns.
Nuttall's perspective offers a critical take for investors and policymakers alike. It suggests that the transition to lower-carbon energy sources, while ongoing, will not happen swiftly enough to offset the decline in conventional oil supply without causing significant price volatility. The Canadian energy sector, with its vast resources, could find itself in an advantageous position if his prediction holds true, though it will continue to navigate complex regulatory and market access challenges.
A Critical Year Ahead
As 2025 draws to a close, Nuttall's outlook places 2026 in the spotlight as a potential inflection point for global energy markets. His call for dramatically higher prices serves as a stark reminder of the delicate balance between energy security, affordability, and the pace of the energy transition. For market watchers, the coming months will be crucial in observing whether the early signs of this predicted tightness begin to materialize.
The analysis from Ninepoint's senior portfolio manager underscores a growing concern among some energy experts: that the world is not investing enough to maintain adequate oil supply, setting the table for a period of heightened price pressure and market uncertainty as soon as next year.
