for Underinvestment Risk
It’s not inevitable that oil prices will hit $150, but there should be no surprises if they rally to that level, or higher.
Total capital and exploration spending on global oil and gas will likely bottom out in 2018, and investment may not recover to levels seen before the 2014 market downturn until the mid-2020s.
At an event hosted by Securing America’s Future Energy, experts warned that a combination of underinvestment in long-cycle conventional petroleum projects and rising geopolitical risk may significantly increase prices next decade.
It’s Déjà Vu All Over Again: OPEC, Petroleum Investment, and the Threat to U.S. Consumers and Energy Security
Over the decades, a key to these extreme shortages and surpluses in the global oil market is OPEC’s role in structurally either undersupplying the market or mismanaging its investment function.
The head of SAFE's policy team talks to Platts about OPEC’s policies distorting the investment cycle, the limitation of shale to meet demand growth, and why a small reduction in oil supply can sharply increase prices.
Electricity and renewable investments fell modestly last year, but the lower price environment over the past three years has taken a particular toll on upstream oil and gas outlays.
The International Energy Agency warns that the age of fossil fuels is far from over. Governments around the world need to step up their policy efforts to find alternatives in the transportation sector in order to keep demand in check.
In order for prices to break out of the current range of $40-$50, there needs to be a sharp drawdown in crude stocks, but so far that hasn't happened.
The results from the BOEM's auction this week were disappointing. The weak interest in the Gulf of Mexico from the industry stems mostly from the current low oil price environment.
Where it once saw risks, IEA's latest report takes a perspective of calm complacency about an extended period of low oil prices.