Analysts at CardinalStone project that global oil prices will average $55.08 per barrel in 2026, as weaker demand and ongoing supply pressures are 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 combined with softer global oil demand is likely to dampen market sentiment, even as Nigeria is expected to increase oil production in 2026.
CardinalStone anticipates Nigeria’s oil output will 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 such as SEPLAT and ARADEL are also expected to boost capital expenditure.
The completion of MPNU and select Shell asset acquisitions through the Renaissance Consortium is likely to further increase national oil production, as seen on Nairametrics.
Despite these domestic gains, concerns over global oversupply persist. The International Energy Agency (IEA) reported that oil supply will exceed demand by 3.84 million barrels per day in 2026, slightly lower than the 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 the oversupply.
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To counter this, OPEC+ has paused output hikes for the first quarter of 2026; however, Brent-tracked global oil prices have yet to show a significant response.
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, pulled 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.
However, domestic CAPEX growth and acquisitions by companies such as SEPLAT and ARADEL could partially offset production challenges, supporting output and investor confidence in the country’s oil sector.
Globally, oil markets will be closely monitored for signs of supply-demand rebalancing, with any shifts likely to influence prices and investment strategies.
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Image Credit: The Nigerian Upstream Petroleum Regulatory Commission
