Crude oil costs had a down yr in 2025. Brent oil, the worldwide benchmark worth, was down practically 20% on the yr, falling from the mid-$70s (and a peak above $80) to the low $60s. Rising international provides and considerations about demand weighed on crude costs throughout the yr.
The droop in oil costs that the business skilled final yr is more likely to proceed influencing the oil market in 2026. Listed here are three daring predictions on what may occur within the coming yr.
Picture supply: Getty Pictures.
Most oil market forecasters have a bearish view on oil costs in 2026. For instance, the U.S. Power Data Administration expects Brent oil to common $55 per barrel within the first quarter of 2026 and stay close to that degree all year long. In the meantime, Goldman Sachs predicts Brent will decline to a mean of $56 subsequent yr, with a draw back to $51 if there’s a peace deal between Russia and Ukraine.
The fundamental catalyst fueling these downbeat views is elevated provides. A number of oil corporations have just lately accomplished or will full main oil enlargement tasks within the coming months. Moreover, U.S. producers proceed to extend their output in locations like the Permian Basin. On high of that, OPEC has been steadily growing its oil provides. Because of this, the world is on tempo to expertise a provide glut in 2026.
My prediction is that crude costs will crash beneath $50 a barrel at one level within the yr. Nevertheless, I anticipate that they will bounce off the underside. I might anticipate that OPEC would scale back its provides in that state of affairs, whereas U.S. producers would doubtless decrease their capital spending.
Decrease oil costs are inclined to spur consolidation within the sector. A wave of mergers occurred in 2020 and 2021, following a decline in oil costs as a result of pandemic. Moreover, there was one other wave of mergers in late 2023, following a decline in crude costs from their war-fueled highs in 2022, after Russia’s invasion of Ukraine.
Oil giants ExxonMobil(NYSE: XOM) and Chevron(NYSE: CVX) have been lively consolidators in recent times. Exxon acquired Denbury Sources for practically $5 billion in late 2023 and finalized its $60 billion megadeal with Pioneer Pure Sources in Might 2024. In the meantime, Chevron purchased PDC Power for over $6 billion in 2023 and adopted that up with its $55 billion mega deal for Hess, which it closed in July 2025 after initially agreeing to the deal in late 2023. These offers will present each oil giants with the gasoline to proceed rising their manufacturing and money movement by means of 2030. Nevertheless, given their monetary energy, they’d doubtless pounce on a chance to bolster their operations if the proper alternative got here alongside.
Moreover, I anticipate we’ll see extra consolidation amongst smaller oil shares in 2026. There are dozens of publicly traded unbiased exploration and manufacturing (E&P) corporations within the U.S. I anticipate a number of of those corporations will be part of forces to extend their scale to higher climate decrease oil costs.
Whereas 2026 will doubtless be a down yr for the oil market, it must be a a lot higher yr for pure fuel shares. Demand for the cleaner-burning gasoline is rising as a result of development of latest liquefied pure fuel (LNG) export terminals and AI information facilities.
A number of power corporations are evaluating alternatives to speculate straight in gas-fired energy crops and information facilities. For instance, ExxonMobil is creating a 1.2 gigawatt energy plant in collaboration with main energy producer NextEra Power, which might mix fuel era with carbon seize and storage. They’re additionally trying to construct a big information middle on the location if they’ll safe a expertise firm buyer for the ability. In the meantime, Chevron has partnered with fuel turbine maker GE Vernova and funding agency Engine No. 1 to construct gas-fired energy crops for information facilities.
I predict that 2026 will likely be an enormous yr for gas-fired energy plant tasks (and in some circumstances, the related information facilities) funded by oil and fuel corporations. These investments would offer power corporations with one other progress driver, which might produce steadier earnings in comparison with their core upstream oil and fuel manufacturing operations.
Oil costs have declined over the previous yr, a development I anticipate will proceed in 2026. I predict that the droop will gasoline one other wave of mergers throughout the sector. It can additionally doubtless lead extra oil corporations to shift their focus to gas-fueled progress drivers, reminiscent of energy crops and AI information facilities. Whereas decrease crude costs will doubtless weigh on oil inventory returns in 2026, the strikes power corporations make to capitalize on the scenario might set them as much as produce high-octane complete returns in 2027 and past.
Before you purchase inventory in ExxonMobil, think about this:
The Motley Idiot Inventory Advisor analyst workforce simply recognized what they consider are the 10 finest shares for traders to purchase now… and ExxonMobil wasn’t one in every of them. The ten shares that made the reduce might produce monster returns within the coming years.
Contemplate when Netflix made this listing on December 17, 2004… in case you invested $1,000 on the time of our suggestion, you’d have $490,703!* Or when Nvidia made this listing on April 15, 2005… in case you invested $1,000 on the time of our suggestion, you’d have $1,157,689!*
Now, it’s value noting Inventory Advisor’s complete common return is 966% — a market-crushing outperformance in comparison with 194% for the S&P 500. Do not miss the newest high 10 listing, accessible with Inventory Advisor, and be part of an investing group constructed by particular person traders for particular person traders.
Matt DiLallo has positions in Chevron and NextEra Power. The Motley Idiot has positions in and recommends Chevron, Goldman Sachs Group, and NextEra Power. The Motley Idiot recommends Ge Vernova. The Motley Idiot has a disclosure coverage.
