Nuttall on the Sectorhttps://www.bnnbloomberg.ca/video/eric-nuttall-s-market-outlook~2548454 COMMENT
General Comments From an Expert(A Commentary)
23/10/2022 at 08:00pm
Fundamentally oil should be $100 a barrel and a price of $100 to $120 should be sustainable for 5 or 6 years. China's zero Covid policy and a potential recession may mean lower oil prices on the demand side but the supply side is important too. Global inventory has fallen the most in history and is still falling. We have had a massive draw-down of reserves, the biggest in history, and it is now ending. The EU embargo on Russian oil could impact Russian production. Also there is upcoming seasonal strength. He sees production growth peaking in 2024. There are record amounts of cash flow and debt is being paid down. Some companies have so much cash flow they can buy back all their stock in three years and therefore privatize. The headwinds should last no more than two months. He feels that at $180, oil will be too expensive to use for discretionary purposes. Next year should be a catalyst to re-rate stocks trading at near generational low valuations.
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Eric Nuttall