In this February 2026 edition of Equitile Conversations, host Gerald Ashley interviews Nic Rogers, head of research at Equitile, revisiting energy markets after their accurate 2025 call: volatile natural gas but subdued oil.

Rogers highlights a rotation toward value and ”heavy asset, low obsolescence” stocks, with energy sector outperformance early in 2026, leading the S&P 500—unusual and historically bearish for other sectors. Oil majors and services firms offer strong cash flows, 5-10%+ buyback/dividend yields, low debt, and historically cheap valuations. The oil-to-gold ratio (~80:1, vs. historical ~20:1) signals extreme undervaluation; past extremes below 30:1 averaged 32% oil returns in the following year.

Bullish drivers include emerging market demand (e.g., India), potential weak dollar, geopolitical tensions (Iran, Venezuela, Russia), and limited supply growth from underinvestment (upstream capex ~36% below 2014 peaks) and high shale depletion. Offshore discoveries (Guyana, Brazil, Namibia) favour deepwater, with tight ultra-deepwater rig capacity post-Transocean/Valaris merger potentially boosting services.

Many energy analysts remain bearish (e.g., IEA glut forecasts), but markets increasingly ignore them, starting to price in a premium. A supply squeeze could surprise, especially if US shale softens.

Natural gas ties to AI/data centre power demand as a bridge fuel until nuclear scales (decades away). US LNG exports double capacity, lifting the price floor amid volatility (”widow maker”). Midstream pipelines offer stable, toll-like returns.

Coal holds approx. 28% global share, the market is Asia-centric (China uses it to firm renewables), with supply constraints in the West (e.g., Australia permitting near-zero new coal mining projects).

Overall, Rogers paints a bullish case for oil (upside surprise) and gas (rising floor despite swings), amid rotation from digital to physical assets. Coal will continue to persist longer-term.

About Nicholas Rogers

Nicholas Rogers is Head of Research at Equitile Investments, joining in 2024. With close to a decade of experience in wealth and asset management, he previously worked at several bulge bracket banks, including HSBC and Citi in Sydney, Australia. His interests lie in the commodity markets and identifying broader macroeconomic trends. 

This episodes book recommendations

Gerald
Prisoners of Geography by Tim Marshall

Nicholas
The Rise of Carry by Lee, Lee, and Coldiron