Analysts at CardinalStone project global oil prices will average $55.08 per barrel in 2026, with weaker demand and ongoing supply pressures expected to weigh on the market.
This outlook was detailed in their economic report for the year, “Indicators Align for Sustained Macro Gains”, published on 6 January 2026.
The report highlighted that a supply glut and weaker global oil demand are likely to weigh on market sentiment, despite expectations of higher oil production in Nigeria in 2026.
CardinalStone expects Nigeria’s oil output to rise to 1.75 million barrels per day (mb/d) in 2026, up from 1.67 mb/d in 2025, supported by a sustained decline in daily crude losses, now at their lowest level since 2009.
Local players like SEPLAT and ARADEL are also expected to increase capital expenditure, with the completion of MPNU and select Shell asset acquisitions through the Renaissance Consortium likely to boost national oil production.
The International Energy Agency (IEA) reported that oil supply will exceed demand by 3.84 million barrels per day in 2026, slightly down from a 4.09 million bpd surplus projected in November but still equivalent to nearly 4% of global demand.
Output increases in 2025 from OPEC+ countries—including Saudi Arabia, Russia, the UAE, Kazakhstan, Kuwait, Iraq, Algeria, and Oman—added around 2.9 million bpd to the market, contributing to oversupply.
To counter this, OPEC+ has paused output hikes for the first quarter of 2026; however, Brent-tracked global oil prices have yet to respond.
Brent Crude closed 2025 down over 18%, falling from $74 per barrel at the start of the year to $60 per barrel by year-end.
While a brief bullish correction lifted prices above $71 between May and July, bearish sentiment from August to December, driven by oversupply concerns, dragged prices back down.
As of 6 January 2026, Brent is trading between $60.9 and $61 per barrel, struggling to reclaim levels above $62 on lower time frames.
Persistent oversupply and weaker demand are expected to limit upside for oil prices in 2026, potentially affecting earnings for major producers like Nigeria.
Local CAPEX growth and acquisitions by companies such as SEPLAT and ARADEL could partially offset production challenges, supporting output and investor confidence in the domestic oil sector.
Globally, oil markets will be closely watched for signs of supply-demand rebalancing, with any shift likely to influence prices and investment strategies.
Nigeria’s oil sector remains a critical driver of the economy, with production currently supported by local and international companies.
SEPLAT and ARADEL are among the largest listed producers, actively expanding operations and investing in assets to sustain output.
SEPLAT and ARADEL are among the largest listed producers, actively expanding operations and investing in assets to sustain output.
Brent Crude, the global benchmark, remains below its July 2025 high of $72 per barrel, reflecting ongoing oversupply pressures and cautious market sentiment.