Amidst a backdrop of geopolitical tensions causing the price of oil to rise, one portfolio manager says the energy market is currently viewed through a state of “euphoria,” despite inventories expected to reach multi-year-lows this summer.

Eric Nuttall, partner and senior portfolio manager at Ninepoint Partners, says the oil market remains “fundamentally tight,” adding that inventories will be heading into multi-year lows by the summer.

“It’s tight because demand has been exceeding the expectations of those who are bearish (and) worried about the slowdown of the U.S. economy,” Nuttall told BNN Bloomberg during an interview on Monday.

He added that investors must consider larger pressures on supply growth this year, “namely,” he said, “in the U.S. Shale, and the effectiveness of the cut on the part of Saudi Arabia and OPEC+.”

Nuttall said he does not believe there’s a “meaningful political risk premium.”

In January and February, he explained, investors thought oil would hit US$80 by the summer.

“I do think there’s a couple dollars — two to three dollars in the oil price now — but we remain bullish in the outlook for oil. We’re not calling for $100 oil — it’s becoming a little too topical right now. There’s a bit of a euphoria in the energy market right now,” he explained, adding that he believes the market is “just a little ahead of itself by a couple months.”

Nuttall explained that oil is currently overheated by a “couple of dollars” and a “couple of months.”

Despite this, he remains optimistic.

“We are still very constructive with the outlook going forward,” he said.

To watch the rest of Nuttall’s video with BNN Bloomberg, watch the video above.