Crédit Mutuel Asset Management: Energy: a potential game-changer for 2026

By François RIMEU, Senior Strategist, Crédit Mutuel Asset Management

Crédit Mutuel Asset Management is an asset management company of Groupe La Française, the holding company of the asset management business line of Credit Mutuel Alliance Fédérale.

Energy prices are currently low, whether for a barrel of oil or natural gas. Regarding oil, this is justified by a market currently experiencing an oversupply; an excess that, according to the latest forecasts from OPEC[1], the EIA[2], and the IEA[3], should remain true in 2026. For natural gas, the logic is similar, and for both markets, the main reason is the same: U.S. production has been stronger than expected throughout 2025. We should also not forget the quota increases granted throughout the year by OPEC+[4], which also contributed to higher-than-expected oil production earlier in the year. Added to this are recent advances in the process of “ending hostilities” between Russia and Ukraine, increasing the likelihood that Russian commodities will once again become “purchasable” by all countries.

As a result, the consensus today is quite negative on energy prices, which has several consequences. First, it supports the economic outlook for all net-importing countries, meaning almost all developed countries and all Eurozone countries. It also supports the ongoing disinflationary trend, both through direct (for example, energy represents 10% of Eurozone inflation) and indirect effects. Finally, it also has significant effects on the earnings trajectory of many companies, with positive impacts for sectors like transportation or chemicals, but obviously negative impacts for the oil and gas industry.

However, this consensus could be challenged for several reasons:

First, we are approaching levels that could severely impact the profitability of some U.S. producers. According to the latest estimates from the Dallas Federal Reserve, the price at which production is no longer profitable is around $61 for large companies, and the WTI (West Texas Intermediate; the U.S. benchmark price) is trading below $56 as of December 16.

The war between Russia and Ukraine could drag on. This would not fundamentally change the current dynamic but could push prices up by 5–10%. (Source: Bloomberg) Investor positioning is very pessimistic today. CFTC (Commodity Futures Trading Commission) data shows extremely low speculative positions at present. Global economic improvement, a weak dollar, record U.S. deficits, the German stimulus plan and a Federal Reserve cutting rates, etc.; generally speaking, this is an environment that is positive for energy demand dynamics and has historically been associated with phases of energy price appreciation. The continued rise in energy demand from data centers is expected to persist. This is probably the most significant long-term risk, and it will probably not affect all energy sources equally. The EIA estimates that electricity demand from data centers should double within two years to reach 835 TWh, which is equivalent to Japan’s electricity consumption. While renewable energy in Europe will likely suffice to meet this increased demand, it will probably be more challenging in the U.S. This should tend to push natural gas prices upward, especially if capacity constraints in production emerge.

In conclusion, while the situation today seems very consensual regarding maintaining low oil and natural gas prices, a sudden increase in the price of a barrel of oil would undermine many current certainties: disinflation, Fed rate cuts, sustained consumption, etc. This would likely result in increased macroeconomic instability and greater volatility in financial markets.