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Eric Nuttall’s TSX Picks for the Looming Oil Drought: Running on Fumes

As global supply buffers vanish and the Strait of Hormuz closure threatens refining networks, Ninepoint Partners' energy expert predicts a historic crude rally, and reveals the three Canadian producers poised to cash in.

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Eric Nuttall’s TSX Picks for the Looming Oil Drought: Running on Fumes

The global energy market has been comfortably snoozing behind temporary safety buffers, but the alarm clock is about to ring with a vengeance.

According to Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, the world is sleepwalking into the worst energy crisis in history. With the Strategic Petroleum Reserve tapped out and the Strait of Hormuz anticipated to remain shuttered for months, the illusion of safety is rapidly dissipating. Nuttall forecasts an imminent supply deficit of seven to eight million barrels per second, a catastrophic shortfall that could fracture the global refining system by July 1. The only cure for this level of supply destruction is extreme price discovery. Nuttall predicts oil prices will inevitably blast past the US$150 per barrel mark, eventually settling at a massive medium-term floor of US$80 per barrel as the world attempts to rebuild the most depleted commercial inventories in history. Against this incredibly bullish backdrop, Nuttall sees a 50 percent or greater upside for his top Canadian oil picks.

Leading the charge is Cenovus Energy (TSX: CVE). Nuttall argues the integrated oil giant offers everything a bull could possibly want, boasting record-high refining margins and a top-tier, long-life inventory capable of sustaining production for over three decades. Furthermore, the company’s recent integration of MEG Energy (TSX: MEG) is proving wildly accretive, with the potential to pay out by year-end under current pricing. Trading at an unwarranted discount to global peers, Nuttall pins a US$58 target on the stock. The company's leadership shares this confident outlook. Following a record-breaking first quarter that saw upstream production hit 972,100 barrels of oil equivalent per day, President and CEO Jon McKenzie noted that from record upstream production to seamless project execution and robust downstream performance, the entire suite of integrated assets contributed to a terrific quarterly result. McKenzie emphasized the macro tailwinds, stating the company has an unprecedented opportunity to produce more oil to meet global demand, urging that now is the time to create the conditions so the industry can be globally competitive.

Next on the radar is Strathcona Resources (TSX: SCR), a producer poised for aggressive expansion. Nuttall expects the company to grow production by roughly 50 percent over the next four years while gushing approximately US$900 million in annual free cash flow. This massive cash generation is anticipated to fund a special dividend yielding around nine percent. Nuttall sees fair value at US$67, representing a 48 percent upside. While the company recently navigated a challenging first quarter due to squeezed margins, leadership remains strictly focused on capital discipline. Embracing a rigid "Value over Volume" strategy, management has clearly communicated that once near-term leverage targets are achieved, they are committed to returning 100 percent of free cash flow to shareholders through dividends and share buybacks.

Rounding out the top picks is Whitecap Resources (TSX: WCP). Known for drilling some of the most highly economic wells in Canada, the company holds over 25 years of premium inventory across the prolific Montney and Duvernay formations. Nuttall anticipates the stock will be a primary beneficiary of capital rotation as investors seek fresh Montney exposure, setting a US$25 price target that implies a 54 percent potential upside. The company is already demonstrating its operational prowess. President and CEO Grant Fagerheim recently celebrated the company's ability to exceed production estimates, crediting top-tier execution and strong asset-level performance. Fagerheim proudly highlighted that all planned light oil and condensate wells were brought online on or ahead of schedule prior to spring breakup.

If history is any indicator, Nuttall’s aggressive plays carry weight. His previous slate of picks generated a staggering 74 percent average total return, heavily driven by massive triple-digit gains from names like Tamarack Valley Energy (TSX: TVE) and steady growth from NuVista Energy (TSX: NVA). For investors willing to brave the volatility, the incoming crude supply shock might just be the catalyst of a lifetime.

Sources:

  • BNN Bloomberg: Eric Nuttall’s Top Picks for May 15, 2026
  • Cenovus Energy: Q1 2026 Earnings Release and Management Commentary
  • Strathcona Resources: Early 2026 Strategic Directive and Earnings Updates
  • Whitecap Resources: Q1 2026 Earnings Release and Management Commentary

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