This TSX space and defence stock is a bright spot in an otherwise struggling index

Core Viewpoint - The Iran conflict has led to a surge in oil and natural gas prices, but future price trajectories remain uncertain. Scotia Capital Markets analysts suggest focusing on Canadian energy stocks with above-average yields amid this uncertainty [1] Oil Sector Summary - Oil-weighted companies are currently pricing oil at an average of US$71 per barrel, while West Texas Intermediate (WTI) is trading around US$95 [1] - Scotia's top picks in the oil category include: - Cenovus Energy Inc. (CVE:TSX) - Whitecap Resources Inc. (WCP:TSX) - Ovintiv Inc. (OVV:TSX) - These companies are favored due to their outlooks based on lower WTI prices compared to peers and solid exposure to stronger oil prices [1] - Defensive picks in the oil sector are: - Freehold Royalties Ltd. (TSX:FRU) - PrairieSky Royalty Ltd. (PSK:TSX) [1] Natural Gas Sector Summary - Scotia's top picks in the natural gas space include: - Topaz Energy Corp. (TPZ:TSX) - Spartan Delta Corp. (SDE:TSX) - Peyto Exploration and Development Corp. (PEY:TSX) - Expand Energy Corp. (EXE:NYSE) - Topaz Energy offers ultra-high margin exposure to prime assets in the Western Canada Sedimentary Basin [1] - Spartan Delta is recognized as a top-growth name operating in the Duvernay region [1] - Expand Energy is highlighted as the best option in the U.S. gas space for its upside potential and downside protection [1] - Vermilion Energy Inc. (VET:TSX) provides exposure to the European gas market [1]