Canadian oil and gas companies are seeing higher profits, but volatile crude prices are keeping investment in check, according to Deloitte’s latest energy forecast. The report, released Oct. 8, says the industry’s operating profits rose 68 per cent in the second quarter compared with the first three months of 2026. Capital spending, however, has not kept pace. Deloitte says producers are favouring drilling projects that can deliver returns quickly, rather than committing to large, long-term developments in response to higher oil prices. “Producers view the current price environment as temporary, or uncertain, rather than rooted in a fundamental supply-demand shift,” the report says. Brent crude, a global oil benchmark, fluctuated between US$68 and US$105 a barrel during July and August. The report attributes that volatility to supply disruptions in the Middle East, including constraints on shipments through the Strait of Hormuz. Deloitte expects investment to remain focused on projects with quicker returns, with major spending driven by long-term strategic priorities. Lower crude prices forecast for 2027 Deloitte forecasts West Texas Intermediate, the North American oil benchmark, will average US$90 a barrel in the final three months of 2026, before easing to an average of US$76.50 across 2027. The outlook points to expectations that global oil production and inventories will recover next year. Natural gas markets face a different challenge: abundant supply. Canadian natural gas production averaged more than 20 billion cubic feet a day during the quarter, approximately five per cent higher than during the same period last year, according to the report. Prices at Alberta’s AECO trading hub averaged below C$2 per thousand cubic feet over the first eight months of 2026, despite rising Canadian liquefied natural gas exports. Calgary pump prices rebound Meanwhile, Calgary drivers have been dealing with their own sharp swings in gas prices. By Wednesday, many stations were charging in the $1.70-per-litre range. Some had been selling gasoline for around $1.40 or less after Alberta suspended its 13-cent-per-litre fuel tax. A gas analyst told CTV News a local price war pushed some stations’ prices below cost before rising wholesale prices helped drive them back up. “A price war pushed prices down 20 to 30 cents a litre below cost, coupled with then another increase in the wholesale market of roughly eight cents a litre on Monday, precipitated a pretty hefty increase for some of the retailers across Calgary,” said Patrick De Haan, GasBuddy’s head of petroleum analysis. Analysts predict the price at the pump to rise another 10-15 cents on Thanksgiving weekend before possibly rising again in the third week of October.
