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Oil and gas prices expected to rise for the rest of 2016

Alberta wildfires halt production and contribute to reduced global oversupply

CALGARY, ALBERTA (July 5, 2016) – Oil prices are expected to strengthen over the next few quarters as crude production continues to flatten and oversupply is reduced, according to the latest oil and gas price forecast by Deloitte’s Resource Evaluation and Advisory (REA) group. The forecast also expects natural gas prices to grow through 2017, although high storage levels and below-average demand could moderate the rate at which those prices increase.
“The wildfires around Fort McMurray forced more than a quarter of Alberta’s oil production offline, impacting the global market,” says Andrew Botterill, Partner, REA group. “The interruption in oil sands output temporarily saw global demand rise relative to supply, leading to higher prices, but this has eased back slightly as some production has resumed.”
Botterill notes that the temporary loss of so much Alberta oil production, which is mostly sold at Western Canadian Select (WCS) pricing, also led to a narrowing in the differential between the West Texas Intermediate (WTI) price and that of WCS, but that is expected to be short-lived as oil sands production gets back to more normal levels.
Globally, the REA forecast anticipates a slight increase in oil prices for the remainder of 2016, but Botterill says higher prices aren’t expected to lead to increased production, with producers looking to pay down debt and maintain dividends instead. As a result, demand will eventually outpace supply, helping to sustain medium-term price growth.
The price forecast for all oil reference prices shows an increase from the Q1 2016 forecast, with an expected average price of $50/bbl USD for WTI, $60/bbl CAD for Edmonton Light, and $51/bbl USD for Brent.
Gas prices, which showed strong growth over the last quarter, are expected to moderate somewhat over the rest of the year. The REA group is expecting $2.60/Mcf USD for NYMEX, $2.10/Mcf CAD for AECO, and $1.60/Mcf CAD for Station 2.

For Deloitte’s complete oil and gas price forecast dated June 30, 2016, visit our website.


About Deloitte

Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.


For more information, please contact:

Stephanie Gough
On behalf of Deloitte
403-268-7853 |

Marilyne Plouffe
Media Relations, Deloitte

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