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Low Oil Prices Today May Not Mean Low Investment Tomorrow
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Low Oil Prices Today May Not Mean Low Investment Tomorrow

Carole Nakhle
GIS, 2016
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Editorial Rating

8

Qualities

  • Innovative

Recommendation

Oil prices have fallen steadily since their mid-2014 highs, so global energy firms are weighing the cost implications of their future oil and gas investments. Analysts using traditional metrics would predict that the low price of oil would constrain short- and medium-term investment in infrastructure, capacity and exploration, leading to significantly higher prices over the next decade. Yet as this insightful report from energy economist Carole Nakhle discloses, other factors that might upend conventional thinking are affecting the energy investment climate and supply flows. getAbstract recommends this brief but astute recap of the global energy complex to executives and business managers.

Take-Aways

  • Low oil prices have aroused concerns that investments in oil and gas may not occur, causing future supply disruptions and higher prices.
  • However, low oil prices are not absolutely correlated with investment decisions and future supply targets.
  • More germane to the investment process are increasing costs, regulatory actions and the limited numbers of skilled workers in the energy industry.

About the Author

Carole Nakhle, an energy economist, is the director of Crystol Energy, a consultancy.

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