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Ninepoint Energy Market Update

Ninepoint Energy Market Update - 3.13.2025
Key Takeaways
  • The Twilight of U.S. Shale is Confirmed
  • OPEC’s Spare Capacity is Overestimated
  • Oil Price is Undervalued
  • Energy Stocks Remain Deeply Undervalued

March 13, 2025

In this week’s update, Eric Nuttall, Senior Portfolio Manager of Ninepoint Energy Strategies, recaps CERAWeek in Houston, where top oil executives, analysts, and industry leaders debunked long-held false narratives and reinforced the long-term bullish case for oil and energy stocks.

 Key Topics Covered:

  • CERAWeek’s Main Theme: Energy Reality – False bearish oil narratives are finally being dismantled.
  • IEA Shifts Its Tone – Fathi Birol admits investment in oil & gas is still necessary, reversing previous claims. 
  • The Twilight of U.S. Shale – Former Pioneer CEO Brian Sheffield confirms U.S. shale inventory depletion. 
  • Shale Executives Sound the Alarm – Industry leaders predict U.S. oil production will peak within five years. 
  • Drill Baby Drill? It’s a Myth! – U.S. shale growth has slowed to its lowest pace outside of COVID. 
  • Non-OPEC Supply Peak is Near – OPEC’s spare capacity will soon be absorbed, creating a global supply crunch. 
  • RBC Report: OPEC’s Real Spare Capacity – Only 900,000 barrels/day of net new production expected over 18 months. 
  • Oil Price Disconnect – Oil trades ~$16 below fair value due to false narratives & market sentiment. 
  • Energy Stocks at Deep Discounts – Valuations remain low, with top companies trading at 12-19% free cash flow yields. 
  • M&A in Canadian Energy – Industry players recognize undervaluation, leading to more acquisitions. 
  • Tariff Uncertainty & Market Overreaction – Even if U.S. tariffs on Canadian oil persist, the cash flow impact is minimal.

 With peak non-OPEC supply on the horizon and OPEC’s capacity nearing exhaustion, we remain highly bullish on oil beyond 2025.

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