Oil prices are hovering around $60 per barrel heading into 2026 – a level that has many investors cautious after a year dominated by artificial intelligence (AI) stocks and bond market rallies.
But veteran strategist Peter Boockvar sees opportunity where others see fatigue.
Speaking on CNBC’s Money Movers, the chief of investments at OnePoint BFG Wealth Partners argued that crude is “the most compelling and cheapest asset” for 2026.
Why is oil the cheapest asset for 2026
Boockvar emphasised that oil remains deeply undervalued compared to other asset classes, noting that investors have overlooked energy in favour of technology and fixed income.
Unlike stocks trading at stretched multiples, crude prices reflect real supply-demand fundamentals.
With global inventories tightening and OPEC+ maintaining discipline, the market veteran believes the market is mispricing oil’s upside.
According to him, equities tied to crude production will deliver outsized returns – especially since valuations remain far below historical averages.
For investors seeking value, oil offers a rare combination of affordability and growth potential.
Why oil is the most compelling asset for 2026
Beyond valuation, Boockvar pointed to structural demand drivers that support oil’s case in 2026.
Emerging markets continue to expand energy consumption, while geopolitical risk has reinforced the importance of a reliable supply.
“The energy complex is set up as 2026’s surprise winner,” he explained, highlighting that crude demand is resilient even amid transitions to renewables.
With NATO boosting defence spending and infrastructure projects accelerating worldwide, oil remains a critical input heading into the new year.
Boockvar argued that these secular tailwinds will underpin prices, making crude a hedge against both inflation and geopolitical risk.
In his view, investors ignoring energy are missing a fundamental macro story.
Portfolio diversification and investor positioning
Boockvar also stressed oil’s role in portfolio construction. After a year where capital flooded into AI stocks and bonds, he sees energy as a contrarian play.
“Investors are underweight oil, and that’s where the opportunity lies,” he told CNBC. By adding exposure to crude and related stocks, portfolios gain diversification against tech-heavy allocations.
He noted that oil’s cash flow generation and dividend potential make it attractive for the income-seeking investors.
Moreover, energy’s cyclical nature provides balance in markets where growth sectors dominate.
Boockvar concluded that positioning in oil now could capture both near-term appreciation and long-term resilience, especially as broader markets face valuation risks.
Bottom line
Peter Boockvar’s call on oil reflects a broader contrarian theme: while investors chase momentum in technology and bonds, energy offers value, demand resilience, and diversification.
With crude prices near $60 and supply-demand dynamics tightening, he believes oil is uniquely positioned to outperform in 2026.
“The most compelling and cheapest asset” may not be in “Silicon Valley” but in the energy fields, where fundamentals and cash flow tell a different story.
For investors, Boockvar’s thesis is a reminder that sometimes the overlooked sectors deliver the biggest surprises.
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