A Canadian portfolio manager says he remains bullish on the global oil industry despite signs of a demand slowdown.

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, told BNN Bloomberg that he believes certain organizations such as the International Energy Agency (IEA) are underestimating the demand for oil in 2024.

“(The IEA) is very, very pessimistic on demand,” he said, adding that there was a consensus among those he spoke with during a recent energy-focused trip to Saudi Arabia that the organization has become overly politicized.

“I think there's concern that too many people are listening to an organization that no longer serves its original purpose.”

Nuttall said that OPEC has a better track record of accurately predicting oil demand. The organization forecasts demand of 2.25 million barrels per day in 2024, compared to the IEA’s 1.2 million barrels per day.

Nuttall said that he sees the market being “infatuated” with narratives about slowing demand and faltering OPEC cohesion, but that after his trip to Saudi Arabia he believes those narratives remain false.

“I think we suffer from a sentiment problem, not a fundamental problem,” he said.

Canada’s energy outlook

Nuttall said that his recent trip also reinforced his view that other resource-rich countries like Saudi Arabia are approaching the clean energy transition much more effectively than Canada is.

“They're getting it right and we're getting it wrong. In Canada, we think we're going to solve the climate crisis by taxing farmers who use natural gas to dry their crops,” he said.

“(Saudi Arabia) is promoting oil and natural gas production knowing that the demand will be there for decades ahead and leveraging the resource that offers to then invest in technologies such as carbon capture… it's just a much smarter approach that they're taking.”

Nuttall said oil’s strong fundamentals have set up Canadian energy stocks for success this year, and added that recent M&A activity in the space is mainly a “function of poor sentiment.”

“Companies must get bigger to gain relevance to the ideas list of the generalist investor that is only going to own two or three names, and so we're seeing that consolidation further,” he said.