Is Energy’s Outperformance Sustainable? Part 2
For the reasons detailed in “Part 1: Reduced Incentives to Invest” and despite the rise in oil prices, there has been little response in capital investment necessary to increase production. Absolute upstream oil and gas investment remains at the lowest levels in a decade; factoring in inflation, real investment is even lower. Capital expenditures as a percent of cash flow from operations have fallen to 30-year lows.
