Deloitte sees oil hovering at $58 per barrel as glut drags on, while gas rises

A pair of energy forecasts released Tuesday see lacklustre crude oil prices continuing this year amid a global supply glut and natural gas prices picking up steam as more Canadian shipments make their way to Asia.

Consulting firm Deloitte expects West Texas Intermediate, the key U.S. light oil benchmark, to average US$58 per barrel — about where it’s trading at currently.

That’s about 20 per cent lower than it was at this time last year and roughly 12 per cent below the commodity’s 2025 average.

The Organization of the Petroleum Exporting Countries has deferred some production increases, but “we do feel there’s a little more downward pressure that could come into prices in 2026,” said Deloitte Canada partner Andrew Botterill.

 

The forecast doesn’t account for the U.S. raid on Venezuela over the weekend in which President Nicolas Maduro was captured. U.S. President Donald Trump has said he wants American energy majors to take control of Venezuela’s oil assets.

The South American country has massive oil reserves with a similar chemical makeup to Alberta’s oilsands crude and refineries on the U.S. Gulf Coast are well suited to handle that type of oil. A lifting of U.S. sanctions on Venezuelan crude and a ramp up of production could pose a competitive threat to Canadian supplies in the Gulf Coast market.

Botterill sees two different scenarios potentially playing out.

“The turmoil of Venezuela itself may bolster some prices in the short term,” he said.

“But on the flip side, we still are in a dramatically oversupplied system right now. So I don’t think (companies) will have a lot of short-term effects, but it’s certainly something that Canadian producers especially will be looking at into the mid- and long-term to understand some of their investments.”

Analysts at ATB Capital Markets, meanwhile, are expecting a WTI price of US$60 a barrel this year.

Global oversupply should peak in the first quarter of this year, gradually improving to a much tighter market in 2027 and 2028 as U.S. shale producers burn through their top-performing wells. That should bode well for Canadian producers with long-life, quality assets, said the ATB report.

With the startup of the Trans Mountain pipeline expansion to the West Coast in 2024, the price gap between heavy oilsands crude and WTI has “structurally evolved,” as the ability to sell the resource in Asia has meant better returns for Alberta producers, added the report.

“Egress capacity out of the (Western Canadian Sedimentary Basin) is not expected to be an issue over the next few years,” said the ATB analysts.

For natural gas, ATB is expecting Alberta prices to strengthen to $3.30 per Million British Therman Units (MMBtu) this year from roughly $1.70 last year thanks in large part to the ongoing ramp up of the LNG Canada export terminal in Kitimat, B.C. that sent its first shipment of gas to Asia last summer.

Deloitte expects natural gas prices in Alberta to rise to $2.95 per MMBtu this year.

“That’s just on the back of a far more balanced Canadian system,” said Botterill, who added that demand from energy-hungry artificial intelligence data centres isn’t being reflected in pricing yet, but it’s something he’s watching closely.

“It’s a good news story for natural gas as a product, and there’s definitely going to be more demand.”

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