Forecasts predict lackluster oil and higher gas prices in Alberta in 2026

Two energy forecasts released Tuesday show lackluster crude oil price This will continue this year amid global oversupply and rising natural gas prices as more Canadian shipments head to Asia.

Consulting firm Deloitte awaits West Texas Intermediatethe main benchmark for light oil in the United States, at US$58 per barrel on average – approximately the current level of its price.

That’s about 20 percent lower than the same time last year and about 12 percent lower than the 2025 average for this commodity.

The Organization of the Petroleum Exporting Countries (OPEC) has postponed some production increases, but “we think there is a little more downward pressure that could weigh on prices in 2026,” said Andrew Botterill, partner at Deloitte Canada.

The forecast does not take into account the US raid on Venezuela this weekend in which President Nicolas Maduro was captured.

US President Donald Trump has said he wants US energy majors to take control of Venezuela’s oil assets.

The South American country has huge oil reserves with a chemical composition similar to that of Alberta tar sands crude and refineries on the US Gulf Coast are well suited to processing this type of oil.

A lifting of U.S. sanctions on Venezuelan crude and a ramp-up in production could pose a competitive threat to Canadian supplies in the Gulf Coast market.

Botterill sees two different scenarios potentially playing out.

“The unrest in Venezuela itself could support some prices in the short term,” he said.

“But on the other hand, we’re still in a significantly oversupplied system right now. So I don’t think (the businesses) will have much of an impact in the short term.”

“But it’s certainly something that Canadian producers will be looking at particularly in the medium to long term to understand some of their investments.”

Analysts at ATB Capital Markets expect a WTI price of US$60 per barrel this year.

Global oversupply is expected to peak in the first quarter of this year, gradually improving into a much tighter market in 2027 and 2028 as U.S. shale producers burn their best-performing wells.

This should bode well for Canadian producers with quality, long-term assets.

With the Trans Mountain pipeline expansion to the West Coast starting in 2024, the price differential between heavy tar sands crude and WTI has “structurally shifted” as the ability to sell the resource in Asia has translated into better returns for Alberta producers, the report says.

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

The risk of Venezuelan barrels re-entering the U.S. market in significant quantities was a risk that was seeping in the background before Maduro’s capture, said Patrick O’Rourke, managing director of equity research at ATB.

Currently, Venezuela produces around one million barrels of oil per day and China is its largest export customer.

“There’s a long way to go before we see significant growth in volumes,” O’Rourke said of the time and investment required.

“The risk is that perhaps these barrels arrive in the Gulf market and are transported today to China at a lower price than Canadian barrels.”

For natural gas, ATB expects Alberta prices to firm to $3.30 per mmBTU this year, up from around $1.70 last year, largely due to continued ramp-up at LNG Canada’s export terminal in Kitimat, B.C.

The first shipments left the plant last summer bound for Asia, but outbound volumes have been unstable until recently, O’Rourke said.

“We haven’t really realized the full impact of LNG Canada yet,” he said.

“We hope to see more consistent operations and more gas moving west.”

Deloitte expects natural gas prices in Alberta to reach $2.95 per mmBTU this year.

“It just comes down to a much more balanced Canadian system,” Botterill said.

Botterill said demand from power-hungry artificial intelligence data centers isn’t yet reflected in prices, but it’s something he’s watching closely.

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

NOTE: This is a corrected story: an earlier version said Deloitte expected natural gas prices in Alberta to reach $2.95 per mmBTU next year.

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