Oil and Gas News and Energy, Thursday, January 15, 2026 - Oil Market Oversupply and Rapid Growth of RES

Global News of the Oil, Gas, and Energy Sector for Thursday, January 15, 2026: Oil, Gas, Electricity, Renewables, Coal, Petroleum Products, and Refineries. Key Events in the Global Energy Market, Trends, and Factors for Investors and Industry Participants.

Global oil and gas markets at the beginning of 2026 are showing signs of increasing oversupply, while renewable energy continues its record growth trajectory. Oil prices remain under pressure due to surging production in the U.S. and other regions, while demand for hydrocarbons is limited by a slowing global economy. Simultaneously, governments and companies are ramping up investments in "clean" energy, leading to a historic reduction in coal's share and the first decline in coal generation in China and India in over half a century. In such a context, investors and energy sector participants are analyzing the balance of power between fossil fuel oversupply and the prospects of the energy transition.

Global Oil Market

In January, Brent crude is trading in the range of $60–65 per barrel, while American WTI is around $58–60. Prices declined in the fourth quarter of 2025 compared to last year's peak levels. Experts forecast that the average price of Brent in 2026 will be approximately $60 per barrel, while WTI will be around $58. At the January OPEC+ meeting (January 4), it was decided not to change the established production quotas to limit market volatility. Nonetheless, fundamental factors indicate an oversupply:

A survey of analysts in December 2025 showed expectations for an average Brent price around $61/barrel, WTI – $58/barrel in 2026.
New production has come online in the U.S., Canada, and Latin America, boosting export volumes to the market.
Last week, OPEC+ maintained production without cuts, focusing efforts on price stabilization rather than artificial increases.
Russia plans to keep oil and gas condensate production at 2024 levels (around 10.3 million barrels/day), which adds stable supply to the market.

As a result, expectations for the balance of supply and demand remain weakly optimistic: even in the case of unplanned disruptions (in Venezuela, Iran, etc.), the oversupply of oil threatens to suppress prices. Meanwhile, global oil futures continue to fluctuate amid geopolitical risks and moderate demand forecasts. The oil market is operating in a careful monitoring mode regarding OPEC's strategies, inventory data, and the global economic situation.

Overproduction and Geopolitics

According to the International Energy Agency (IEA), in 2026, oil supply is expected to exceed demand by approximately 3–4 million barrels/day, termed the "year of global oversupply." World oil production has significantly increased in recent years due to shifts in the U.S., Canada, Brazil, and the Emirates. On the other hand, OPEC representatives and some producers consider the market relatively balanced. Key factors of oversupply and risks include:

The IEA forecasts a global demand shortfall of about 4% of production, while OPEC anticipates a market close to equilibrium.
China is actively replenishing its strategic oil reserves: purchases in the global spot market have increased, partially absorbing the oversupply.
Global oil tank inventories have reached peak levels since the pandemic in 2020, indicating an increase in onshore stocks.
Sanctions against Russia and Iran are limiting their oil exports (e.g., U.S. restrictions on tankers), but significant price increases have not yet occurred.
Local conflicts (strikes in Venezuela, instability in Libya) create uncertainty in supplies, but their impact on the global balance is limited.

Thus, the oversupply of oil in the market continues to exert pressure on prices. Investors are watching for signals regarding additional production cuts: while supply is above demand, a sharp easing of OPEC+ policies or new sanctions could change the situation in the latter half of the year.

Natural Gas and LNG Market

Seasonal demand is dampening prices for natural gas. In the U.S., gas at the Henry Hub is trading around $3–4/MMBtu due to a mild winter and excess production. In Europe, prices remain around $10–12/MMBtu (TTF) due to reduced storage inventories and heating needs. The international LNG market is also on the brink of oversupply: millions of tons of new export capacity are coming online in the coming years. Key trends in the gas sector include:

Global LNG export capacity is rapidly expanding: over 90–100 million tons of new capacity are planned to come online by 2026-2027 (Qatar North Field, Golden Pass, Scarborough, projects in Africa, etc.), leading to a "seller's market" with oversupply.
Analysts at Bernstein predict that spot LNG prices may decrease from around $12 to about $9/MMBtu as new plants come online. The main burden of price declines will fall on exporters, while consumers (especially in Asia and Europe) will benefit from lower fuel costs.
The U.S. remains the largest LNG exporter: by 2026-2029, its share may rise to around 70% of supplies to the EU (up from 58% in 2025), considering the EU's plans to phase out Russian gas by 2027-2028.
Inventories in European gas storage facilities are at historically low levels (around 82% capacity by October) and could drop to 29% by season-end under cold weather, adding volatility to gas prices.
Production of associated gas is increasing in regions like Perm (USA) and others: new pipelines to the coast are boosting gas supplies for LNG production and local markets.

Ultimately, the gas market is balancing record supplies against seasonal demand. Asia generates about 85% of the growth in LNG demand, but that has stabilized. Europe is importing record volumes of LNG in preparation for the phase-out of Russian supplies. Despite excess supply, current cold temperatures and pipeline constraints may keep prices at moderate levels closer to winter.

Coal Sector

Coal generation in key economies is showing signs of stagnation for the first time. According to energy analysts, coal power generation volumes declined in both China and India in 2025 (by 1.6% and 3.0%, respectively). This was made possible by a record increase in solar and wind capacities, which exceeded the growth in electricity demand. Key observations in the coal market include:

For China and India, 2025 marks the first year since 1973 when total coal generation fell amidst rising energy consumption.
The reason is the explosive growth of "clean" generation: just in 11 months of 2025, solar and wind generation added about 450 TWh, which offset 460 TWh of consumption growth.
However, China has been actively importing coal ahead of the heating season: December coal imports surged by 12% year-on-year to meet short-term demand and replenish stocks.
Global coal prices remain high due to limited development of new mines and sustained demand in some countries (e.g., South Africa and Southeast Asia).
The paradigm shift is evident: as renewable energy continues to grow, coal's share in the energy balance will gradually decline, indicating a potential "peak" in coal power generation by the end of the decade.

Thus, the coal sector is entering a phase of gradual reduction. Despite fluctuations in seasonal demand, the long-term role of coal in global energy is diminishing, while demand for alternative energy sources is rising.

Renewable Energy and Electricity

The global energy sector continues its transition to renewable sources and electrification. In 2025, China set a record for installed solar and wind capacities (over 500 GW of new installations combined), which is twice any previous levels. However, the IEA has revised down its forecast for global renewable energy growth by 20% (to 4600 GW) by 2030, indicating a slowdown in the U.S. and Europe. Key trends in the electricity sector include:

Demand for electricity is expected to grow by approximately 4% per year until 2027, driven by a boom in data centers, electric vehicles, and climate control in developing economies.
Technological advancements: the cost of solar panels, wind generators, and batteries continues to fall, enhancing the competitiveness of renewable energy and electric transportation.
Grid flexibility: due to increased intermittent generation, operators are enhancing the deployment of smart grids and new load forecasting tools (e.g., AI consumption forecasts). In conditions of capacity shortage, large consumers (data centers) are increasingly investing in on-site generation and batteries.
Government policies: despite a trend toward reducing support programs in some countries, overall decarbonization plans in most major economies remain. China, the EU, and the U.S. are committed to further developing renewable energy, though the pace may vary.

Thus, energy systems are balancing between rising demand and the development of renewable technologies. Capacity reserves are increasing, but enhancing grid reliability remains a task for 2026, as financial and technological constraints hamper rapid transition.

Petroleum Products and Refining

The petroleum products market remains tight in the diesel segment and more balanced in gasoline and aviation kerosene. European refineries are operating at full capacity, while the diesel deficit has prompted governments to impose bans on imported petroleum products from Russia (starting in 2025) and encourage increased refining in other regions. Key features include:

Diesel margins continue to grow: in 2025, they surged by about 30% due to export restrictions from Russia and reduced supply following strikes on infrastructure.
Gasoline and aviation kerosene margins are more stable, as global demand for light fuels remains steady; companies are compensating for discrepancies by increasing supplies from the U.S. and Asia.
Global refinery capacities are virtually stagnant: there are few new large refineries, and existing ones are being modernized to meet transitional needs (including processing heavy crudes and producing biofuels).
The development of transnational projects (e.g., pipelines for cheaper grades of oil) has allowed some companies to optimize logistics costs.
Looking ahead, investors are paying attention to environmental standards for products: mandatory blending with bio-components and reduced sulfur requirements are increasing, which also influences refining modernization plans.

Overall, the petroleum products segment is characterized by resilient demand and structural changes: refiners maintain high capacity utilization, and market participants are redirecting some fuel towards producing more environmentally friendly blends and other products.

Strategies of Major Oil and Gas Companies

Global oil and gas companies continue to adapt their strategies to new realities: caution in spending is maintained alongside readiness for long-term energy demand growth. The main trends in the corporate sector include:

CAPEX Reduction: Major players (Exxon, Chevron, TotalEnergies, etc.) have reduced capital expenditure plans for 2026 by about 10%, optimizing projects and securing savings.
BP and Shell: BP announced write-offs of $4–5 billion from low-return projects in the low-carbon energy segment and significantly cut budgets for "green" initiatives, focusing efforts on oil and gas extraction.
Nonetheless, most companies maintain long-term optimism: investments in exploration and development of new fields are shifting to the late decade (2030s), while production plans remain substantial.
In the Middle East and Asia, national oil companies (Aramco, ADNOC, CNPC, etc.) are increasing capital expenditures on upstream projects, preparing for long-term hydrocarbon demand.
Mergers and Acquisitions: financially stable companies are considering purchasing rival assets to take advantage of current market volatility and strengthen their positions.

Thus, major oil and gas players demonstrate a balanced approach: in the short term, stringent cost optimization, while in the long term, expansion of resource bases. This creates conditions for potential consolidation and reassessment of priorities in the development of new technologies and assets.

Outlook and Forecasts for 2026

A balanced conclusion to the winter-spring 2026 season will be critical for the fuel and energy complex. Most analysts believe that the first months of the year will be marked by oversupply, and prospects for price growth will depend on the balance between supply and climate conditions. Key takeaways and expectations include:

2026 could be dubbed the "year of plenty" for fuel: excessive supply of oil and gas in the first half of the year will put pressure on prices. The average Brent price is expected to be around $55–60/barrel (WTI around $55), with sharp deviations only arising from new conflicts or supply disruptions.
Demand for hydrocarbons is limited by mild growth in the global economy and accelerated transition to alternatives. The electrification of transport and industry is gradually reducing oil demand growth, while phasing out coal is prompting long-term shifts in the fuel balance.
Energy efficiency policies and climate change initiatives are influencing the strategies of countries and companies: alongside ensuring energy security, climate ambitions are on the rise (development of renewables, preservation of fossil fuel reserves as strategic resources).
By the end of 2026, markets may gain clarity regarding balances: if rising supplies compensate for moderate demand, prices will stabilize at lower levels, giving investors time for portfolio rebalancing.

In conclusion, as of January 15, 2026, global energy markets are characterized by an oversupply of raw materials that keeps prices in check, alongside unprecedented growth in "clean" energy. Investors and companies continue to closely monitor the balance between the new "green" paradigm and the traditional oil and gas business model, preparing for changes in the structure of global energy distribution.