While crude prices remain depressed, experts suggest the seeds for the next major oil bull market have been planted, revealing a potential contrarian investment opportunity in Canadian Natural Resources (TSX:CNQ) as its stock continues to face downward pressure. Particularly promising should equity markets enter bear territory, the stock has already retreated 26% from last year’s all-time high of $56.
Prominent Canadian energy expert Eric Nuttall recently outlined his market outlook: cautious on oil in the near term but firmly bullish for 2026. As partner and senior portfolio manager at Ninepoint Partners, Nuttall stated in an interview that the seeds have been sown for the next major bull market in oil at some point in 2026, confirming his plans to rotate back to the oil sector that year.
According to Nuttall’s projections, U.S. shale production will normalize while OPEC’s spare capacity gradually returns to market. Additionally, production ramp-ups in Guyana and Brazil will help balance global supply.
This Canadian energy giant offers both income and growth potential.
Analysts note that even amid ongoing oil price volatility, Canadian Natural Resources maintains stable dividend growth (currently yielding 5.71%). Despite industry headwinds approaching year-end, the company continues optimizing cash flows through strategic acquisitions and organic investments. Although the spread between Canadian crude and WTI has narrowed with WTI hovering around $62/barrel (near multi-year lows), the company’s dividend remains secure unless oil falls below $40/barrel.
The commodity sector’s outperformance during the 2022 bear market demonstrated the investment value of this Canadian energy stock. With technology stocks potentially facing AI bubble risks, adding commodity producers like Canadian Natural Resources to portfolios provides effective diversification. Trading at just 10.3 times trailing P/E with increased Q2 production and a clear long-term roadmap, the stock presents compelling value in a bear market.
Management consistently prioritizes shareholder returns through operational optimization and capital return mechanisms. Analysts believe this well-operated energy company will inevitably regain its $100 billion market capitalization, recommending investors accumulate positions during periods of price consolidation or weakness.
