Energy stocks had a tough 2023, but one trader sees some good ways into the sector this year, naming opportunities in both oil and natural gas. Bill Perkins, CEO and head trader at Skylar Capital Management, said he’s “mildly bullish” on oil, but identified several opportunities for retail investors. Demand for oil has been “pretty sluggish” in Asia, he said, while supply has been “exceptional” especially among producers in the Permian basin, located in West Texas and New Mexico. “A retail investor would look closely at possibly going shopping for equities in the Permian, if they believe in the crude oil bull story long term,” he said on CNBC’s ” Street Signs Asia ” Friday. Perkins named Devon Energy , EOG Resources and Diamondback Energy as top picks to play the theme. Outlook for oil Oil prices have been volatile over the past few months. They were driven up in the wake of Houthi attacks in the Red Sea in November, but settled in December following an easing of shipping disruptions. Prices have picked up in the new year after the U.S. warned Houthi militants against further attacks in the Red Sea and OPEC pledged to remain united in supporting prices . Brent crude oil prices were trading around $77.98 a barrel on Friday. Perkins expects the oil market to face continued headwinds such as continued high interest rates and the “ESG premium,” as investors place more weight on investments with ESG (environmental, social, governance) characteristics. U.S. Federal Reserve officials concluded in December that interest rate cuts are likely this year, but meeting minutes released by the central bank on Wednesday did not specify when, and some investors are worried they might come later than expected. “I think when the Fed begins cutting interest rates, people will be looking to stock [up on] storage and actually, have some comfort in carrying supplies. And that will create some demand. There’s obviously risk with the geopolitical situation. And if Asia turns around, and we see demand picking up,” Perkins said. “We’re kind of in a wait-and-see mode … we’re mildly bullish, not too bullish,” he added. Goldman Sachs’ former head of commodities research Jeff Currie, however, struck a more optimistic tone on the oil market, expecting prices to spike. “It is the most investable space out there in the economy right now,” he told CNBC’s ” Squawk Box ” on Thursday. “The return on capital employed exceeds 20% in many parts of the world if this is the low point, and we’re underinvested going forward.” Natural gas Elsewhere within the energy space, Perkins also sees some opportunities in natural gas. “I think … natural gas is further out the curve and has the greatest chance for a price appreciation, given the demand and the exports to the world and the new facilities coming on,” he said. “Natural gas — that’s a good long. Or if you’re not a commodities guy and are an equities guy, which most people are, I’d look at producers that are focused in resources that are close to export,” he added.