While Canada’s underperforming energy sector is rebounding off the lows seen earlier this year, one portfolio manager says it’s unlikely domestic players will enjoy same success as their American counterparts.

“I cannot envision a scenario where Canadian oil and gas and service companies outperform…. given all the impediments we’ve created for ourselves,” Ninepoint Partners’ Eric Nuttall said in an interview on BNN.

Those impediments, in Nuttall’s mind, are regulatory risk and the lack of substantial pipeline approvals.

It’s a different story, however, south of the border — and that’s where Nuttall is deploying cash.

“It all comes down to where am I going to get the most bang for my buck,” said Nuttall, who is currently 85 per cent exposed to the U.S. in his fund.

Many of the firms he’s investing in are trading significantly lower than historic levels. “Fear of oil crashing did not allow people to recognize how strong these companies have been,” said Nuttall.

While he’s not bullish on the Canadian oil and gas players, Nuttall says he believes in the broader energy rally. Fears of a continued supply glut are overblown, said Nuttall, who adds the glut has already dropped by 55 per cent. Supply and demand, he said, could be balanced by sometime early next year.

And though he says he’s not as worried about U.S. production growth, he does recognize the risk that would be posed by OPEC pumping out more crude.