As global markets enter 2026, investors are navigating a landscape shaped by technological transformation, shifting energy dynamics, and renewed macroeconomic confidence. Despite growing enthusiasm for renewable energy and decarbonization, oil and natural gas continue to play irreplaceable roles in the global economy—and remain highly relevant for portfolios seeking stability, growth, and long‑term opportunity.
This article breaks down why the sector matters more than ever—and why Baytex Energy Corp. (TSX:BTE) deserves a closer look.
This article is a journalistic opinion piece that has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
Global markets are strong—and energy is still in the conversation
Global stock markets are on pace for their third straight year of gains, supported by strong corporate earnings, moderating inflation, and robust investment trends.
Even as growth broadens across sectors, energy remains one of the foundational components of global economic activity. Every major industry—from manufacturing to transportation to digital infrastructure—still depends on reliable, scalable, and affordable energy inputs.
Oil and gas, despite criticism and cyclical volatility, continue to serve as critical stabilizers within this expanding market environment.
Natural gas demand is accelerating—even as sentiment toward oil softens
Natural gas is emerging as one of the biggest quiet winners heading into 2026. Demand is accelerating globally, supported by its role in electricity generation, heating, industrial production, and LNG trade.
At the same time, investor sentiment toward oil is hovering near cyclical lows, even though its real‑world importance has not meaningfully diminished.
This divergence—rising demand vs. falling sentiment—creates a compelling setup for value‑oriented investors who recognize that energy markets don’t transform overnight.
Oil still powers:
- Global transportation systems
- Petrochemical production
- Aviation and freight networks
- Industrial processes
- Strategic reserves and national security planning
Its role is deeply embedded in economic infrastructure, meaning low sentiment often signals opportunity rather than decline.
Oil and gas: Still critical pillars of the global energy system
Despite the rapid push toward renewables, oil and natural gas remain critical pillars of the global energy system.
Renewables continue to grow, but they face limitations in:
- Storage capacity
- Grid integration
- Intermittency challenges
- Raw material bottlenecks
- Long infrastructure build‑out timelines
Meanwhile, global electricity demand is exploding—accelerated by artificial intelligence, cloud computing, electrified transport, and data‑center expansion. Energy systems must scale faster than renewables alone can support.
This is where oil and gas continue to provide:
- Baseload reliability
- High energy density
- Scalability during demand surges
- Critical backup capacity
The market’s transition to cleaner energy remains real—but it is also slow and resource‑intensive. Oil and gas ensure the global economy keeps functioning during that transition.
AI and power generation: An overlooked energy catalyst
Some of 2026’s biggest investment themes revolve around power generation required to support artificial intelligence (AI).
Massive computing workloads—training models, expanding data centers, powering high‑performance edge devices—require unprecedented electricity supply.
This expansion increases demand for:
- Natural gas–fired generation
- Gas pipeline infrastructure
- Reliable upstream production
- Energy‑intensive industrial inputs
Simply put: AI needs energy, and oil and gas currently provide the backbone.
For investors, this creates a rare intersection of two major megatrends—energy and artificial intelligence—where traditional resources enable cutting‑edge innovation.
Why Baytex Energy Is worth a look
Baytex Energy stands out as a compelling example of how modern oil companies are evolving to stay competitive and create shareholder value in a changing world.
1. Strong 2026 growth outlook
Baytex is targeting 3–5 per cent annual production growth in 2026, with a capital budget of C$550–C$625 million supporting expected output of 67,000–69,000 boe/d and an exit rate near 70,000 boe/d.
This positions the company as a steady performer in an environment where many competitors are shrinking.
2. Low breakeven, strong resilience
Baytex has improved its sustaining breakeven price to just US$52/bbl, enabling profitability even in weaker oil markets. This resilience makes it particularly appealing during periods when oil sentiment is low.
3. Balanced and solid asset portfolio
Their 2026 plan allocates 55 per cent to light oil and 45 per cent to heavy oil, maintaining diversification across market cycles.
The company is sharpening its focus on core Canadian assets—including the Pembina Duvernay, where production is expected to rise by 35 per cent due to new wells and expanded infrastructure.
4. Financial discipline and shareholder returns
With an industry‑leading net‑cash balance sheet, an extended credit facility, active buyback and dividend programs, and proceeds from asset sales being returned to investors, Baytex is emphasizing efficient capital use and long‑term value creation.
The bottom line
Oil and gas remain essential not because the world lacks alternatives, but because modern economies—and emerging technologies like AI—require reliable, scalable, and affordable energy to function and grow.
- Global markets continue to rise.
- Natural gas demand is accelerating.
- Oil sentiment remains low despite ongoing necessity.
- AI‑driven electricity demand is redefining energy priorities.
In this environment, a company like this can illustrate how certain producers can thrive through disciplined spending, strong financials, and growth.
Join the discussion: Find out what everybody’s saying on the Baytex Energy Corp. Bullboard, and check out the rest of Stockhouse’s stock forums and message boards.
Stockhouse does not provide investment advice or recommendations. All investment decisions should be made based on your own research and consultation with a registered investment professional. The issuer is solely responsible for the accuracy of the information contained herein. For full disclaimer information, please click here.