Deloitte forecasts low crude, strong LNG prices for Canada in 2026

CALGARY — Canada’s oil sector faces continued headwinds in 2026 as global crude markets remain oversupplied, according to a new forecast from consulting giant Deloitte. While oil prices are expected to stay low, natural gas is poised for a rebound thanks to growing LNG exports from Western Canada.Deloitte predicts US benchmark West Texas Intermediate (WTI) will average US$58 a barrel over the next year, roughly in line with current trading, down about 20% from this time last year. The Alberta government is budgeting for $68 a barrel.Canada’s heavy crude benchmark, Western Canadian Select (WCS), is projected to average in the low CAD$60s.“The oversupply is real,” said Andrew Botterill, a partner at Deloitte Canada and lead author of the report. “Even as demand and economies are moving forward, they’re not moving at the robust rates we might hope. We’re currently looking at an oversupply of about three million barrels a day, putting downward pressure on prices — especially in the first half of the year.”The forecast comes after a tumultuous weekend in Venezuelan politics. The US raid on Venezuela that resulted in the arrest of President Nicolás Maduro briefly rattled Canadian energy stocks, with shares of Canadian Natural Resources falling more than 6% on Monday. Yet Deloitte’s analysts say the raid is unlikely to change global prices in the near term.“Canadian crude volumes haven’t had to compete with Venezuelan oil for the last five years,” Botterill noted. “That competition may return in five to ten years, but for now, fundamentals haven’t shifted.”.Deloitte sees weaker — but steadier — silver lining for Canadian oil markets.Even as political tensions rise, Deloitte sees limited immediate impact from Venezuela or other geopolitical risks. OPEC+ countries have indicated they will exercise caution and avoid adding to the global oversupply. Meanwhile, rising production from non-OPEC nations — including the U.S., Canada, Brazil, and Guyana — continues to outpace demand.There is, however, a bright spot for Canada: natural gas. Deloitte forecasts Alberta’s AECO benchmark will rise to roughly $3 per thousand cubic feet next year, up from $1.72 in 2025, as LNG Canada shipments tighten North American supply. The expansion of liquefied natural gas exports, coupled with rising demand from electricity generation and AI-powered data centres, positions natural gas as a key growth engine for North America.“From a macro perspective, we expect much stronger growth on the natural gas side than from oil, thanks to new investment cycles and the shift toward cleaner energy,” Botterill said.Deloitte’s longer-term outlook sees WTI climbing gradually to US$61.20 in 2027 and US$67.65 in 2028. But analysts caution that Canadian producers are likely to remain cautious with investment budgets, aware of the persistent downside risks in the global oil market.“The largest oversupply since the pandemic isn’t driven by shrinking demand but by rising supply,” Botterill said. “Canadian producers will be careful in their investments, recognizing the potential for lower prices ahead.”

Deloitte forecasts low crude, strong LNG prices for Canada in 2026

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