VIDEO — Eric Nuttall: ​"We Remain Bullish" — Oil Prices, Supply and Demand in 2023

After spending several months above the US$100 per barrel mark earlier in the year, both Brent and West Texas Intermediate crude prices look set to end 2022 near US$80. But where will the new year take them?

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, remains positive on the sector.

"I think ultimately we're heading materially over US$100 … (and) I think we should see that at some point next year," he told the Investing News Network, although he said that likely won't happen immediately.

Nuttall offered a slew of supply-side reasons for his bullish stance, including disappointing volume growth from US shale, the end of spare capacity from the Organization of the Petroleum Exporting Countries and the end of Strategic Petroleum Reserve releases in the US. But he also said he thinks recession-related demand concerns are overblown.

"I'm not fussed, and I think this concern about, 'My gosh, we're heading into a recession, oil demand is going to fall and therefore I've got to sell oil and energy stocks' — I think that fear doesn't have a basis when you really dig into it," Nuttall said.

He pointed out that many market participants suffer from recency bias. When it comes to oil demand, that means they think first of 2020, when oil demand fell 8 percent on the back of the COVID-19 pandemic. However, it dropped only 2 percent in 2009 during the Great Financial Crisis. Meanwhile, in other recessionary periods, demand growth has moderated but not declined.

"Check your assumptions," he added. "We still think demand is holding up."

When it comes to stocks, Nuttall said investors have an opportunity right now to buy.

"We think the meaningful return of free cash flow in the form of buybacks and dividends can rerate stocks from generational low valuations," he said. "We think the macro remains positive, stocks remain inexpensive and we can identify catalysts in 2023 that we're optimistic can drive that rerating in share price valuations."

Watch the interview above for more from Nuttall on oil supply, demand and prices in 2023.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

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